Summary form only given. Recent work showed cross-phase modulation (XPM) has interesting features, almost unlimited speed of operation and wide operation bandwidth, for all-optical signal processing such as in nonlinear optical loop mirror-based wavelength conversion. Yet long fiber length requirement together with optical amplifiers needed to obtain suitable phase shift may affect the conversion process due to stimulated Brillouin scattering (SBS) on the drive signal. We demonstrated that high penalty in XPM-based nonlinear device arises from SBS effects when operating with a standard linewidth telecommunication laser.