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sed -i -E "s/(<username>.+)name(.+<\/username>)/\1something\2/" file.xml 

This is, I think, what you're looking for.

Explanation:

• parenthesises in the first part define groups (strings in fact) that can be reused in the the second part
• \1, \2, etc. in the second part are references to the i-th group captured in the first part (the numbering starts with 1)
• -E enables extended regular expressions (needed for + and grouping).