Thanks to AttitudeDesign over on github for this fix. Works perfectly!
"We have managed to fix this, we have amended the following in google-xml-sitemap.php on line 56:
$xml .= "\t\t<loc>" . get_permalink( $post->ID ) . "</loc>\n";
$xml .= "\t\t<loc>" . str_replace('&','&',get_permalink( $post->ID )) . "</loc>\n";
Hope this helps someone, and I hope this will get added into the plugin soon."
5 stars for AttitudeDesign...not the author of the plugin who should be checking this more often! However, the plugin (with the above fix) works perfectly!