thisXDocument does not exist in the IP 2007 object model. It is characteristic of IP 2003.
I don't believe there is a way to replace the entire DOM of a data source the way you seem to be trying to do. What you need to do is create an XPathNavigator for the data source with DataConnections["data source name goes here"].CreateNavigator(), and insert the query parameters using typical XML manipulation methods.
I'm not sure what you mean by "I cannot seem to get the display control to update." If you query a secondary data source, any controls bound to it should automatically update without any special tricks.