It means that the function simplexml_load_string has not been defined -- it is not available to be used. Are you running PHP4 on the server by any chance? The SimpleXML extension is only available (and enabled by default) in PHP5.
Besides your host completely upgrading the server, some hosts (including mine, ASmallOrange), allow you to put a line of code inside your .htaccess that will parse all your .php files as PHP5. Look through your hosts FAQ file or do a quick search on their forums (if they have some) to see if they allow you to do that.