Run:

---%<---
import java.io.ByteArrayInputStream;
import java.util.logging.Level;
import org.xml.sax.helpers.DefaultHandler;
import java.util.logging.LogRecord;
import java.util.logging.XMLFormatter;
import javax.xml.parsers.SAXParserFactory;
public class XMLFormatterBug {
    public static void main(String[] args) throws Exception {
        LogRecord rec = new LogRecord(Level.INFO, "This is a bug\b\b\bdefect.");
        String xmltext = "<?xml version=\"1.0\" encoding=\"UTF-8\"?>\n" +
                new XMLFormatter().format(rec);
        System.out.print(xmltext);
        SAXParserFactory.newInstance().newSAXParser().parse(
                new ByteArrayInputStream(xmltext.getBytes("UTF-8")),
                new DefaultHandler());
    }
}
---%<---

I get ("^H" means the actual control char):

---%<---
java version "1.7.0-ea"
Java(TM) SE Runtime Environment (build 1.7.0-ea-b05)
Java HotSpot(TM) Client VM (build 1.7.0-ea-b05, mixed mode, sharing)

<?xml version="1.0" encoding="UTF-8"?>
<record>
  <date>2007-01-10T08:42:01</date>
  <millis>1168436521500</millis>
  <sequence>0</sequence>
  <level>INFO</level>
  <thread>10</thread>
  <message>This is a bug^H^H^Hdefect.</message>
</record>
Exception in thread "main" org.xml.sax.SAXParseException: An invalid XML character (Unicode: 0x8) was found in the element content of the document.
        at com.sun.org.apache.xerces.internal.util.ErrorHandlerWrapper.createSAXParseException(ErrorHandlerWrapper.java:195)
        at com.sun.org.apache.xerces.internal.util.ErrorHandlerWrapper.fatalError(ErrorHandlerWrapper.java:174)
        at com.sun.org.apache.xerces.internal.impl.XMLErrorReporter.reportError(XMLErrorReporter.java:388)
        at com.sun.org.apache.xerces.internal.impl.XMLScanner.reportFatalError(XMLScanner.java:1411)
        at com.sun.org.apache.xerces.internal.impl.XMLDocumentFragmentScannerImpl$FragmentContentDriver.next(XMLDocumentFragmentScannerImpl.java:2879)
        at com.sun.org.apache.xerces.internal.impl.XMLDocumentScannerImpl.next(XMLDocumentScannerImpl.java:645)
        at com.sun.org.apache.xerces.internal.impl.XMLDocumentFragmentScannerImpl.scanDocument(XMLDocumentFragmentScannerImpl.java:508)
        at com.sun.org.apache.xerces.internal.parsers.XML11Configuration.parse(XML11Configuration.java:807)
        at com.sun.org.apache.xerces.internal.parsers.XML11Configuration.parse(XML11Configuration.java:737)
        at com.sun.org.apache.xerces.internal.parsers.XMLParser.parse(XMLParser.java:107)
        at com.sun.org.apache.xerces.internal.parsers.AbstractSAXParser.parse(AbstractSAXParser.java:1205)
        at com.sun.org.apache.xerces.internal.jaxp.SAXParserImpl$JAXPSAXParser.parse(SAXParserImpl.java:522)
        at javax.xml.parsers.SAXParser.parse(SAXParser.java:395)
        at javax.xml.parsers.SAXParser.parse(SAXParser.java:198)
        at XMLFormatterBug.main(XMLFormatterBug.java:13)
---%<---

The reason is that java.util.logging.XMLFormatter.escape(StringBuffer,String) does not take into account the possibility of non-XML-safe characters as defined in the XML spec.