The solution is not to write to the Contact Selector itself, but to the
XDocument.DOM object.
Creating new nodes and adding them to the DOM will automatically update the
contact selector in the form.

I cloned a IXMLDOMNode in order to get a new node and then changed the
elements in the new node before adding it to the DOM using the appendChild()
method.

A snippet of the code I used:

           IXMLDOMNode[] newNodes = new IXMLDOMNode[expandedUsers.Length];
           for (int m = 0; m < expandedUsers.Length; m++)
           {
               newNodes[m] = node.cloneNode(true);
               newNodes[m].firstChild.text = expandedUsers[m].DisplayName;
               newNodes[m].firstChild.nextSibling.text =
expandedUsers[m].AccountId;
               newNodes[m].firstChild.nextSibling.nextSibling.text =
expandedUsers[m].AccountType;

               searchNode.appendChild(newNodes[m]);
           }

where expandedUsers is an array of users in the Contact Selector.

Best regards