How about using the .html() function?
$('#offending-element-containing-stuff').html(
$('#offending-element-containing-stuff').html().replace(/good/g, 'bad')
);
This takes all the HTML inside the element with the id offending-element-containing-stuff, replaces the characters and writes it back.
May be very slow, though.
If you need to search the whole document, use $(document) instead of $('offending-element-containing-stuff) (twice).
EDIT: Notice that I replaced the search string by a regular expression with the modifier /g to replace all occurrences.
MvanGeest
2010-06-16 19:27:37