R – get this error in SPFieldCollection.AddFieldAsXml()? “The specified field name is too long”

Luckily, in SharePoint 2010, you can declaratively do this by setting all required properities as shown in the following working example.

<Field Type="Lookup" DisplayName="Link Type" Description="Represents link type." 
Required="TRUE" EnforceUniqueValues="FALSE" List="Lists/Links Types" WebId="~sitecollection" 
Overwrite="TRUE" PrependId="TRUE" ShowField="Title" UnlimitedLengthInDocumentLibrary="FALSE" 
Group="Research Links Columns" ID="{a15e9fa2-4ea0-41f1-a583-b21d53cf72d3}" 
SourceID="{30650f6f-fbb8-4acc-a935-29745f5d3c59}" StaticName="Link_x0020_Type" 
Name="Link_x0020_Type" Hidden="FALSE" ReadOnly="FALSE"></Field>

It's important to set WebId to have value of "~sitecollection" and set Overwrite to be TRUE.
More info

are all required features (publishing infrastructure etc.) activated before performing this action? use something like the following:

// Check if the 'Publishing Prerequisites' feature is at the web and activated
var pubprereqguid = new Guid("A392DA98-270B-4e85-9769-04C0FDE267AA");
if (site.Features[pubprereqguid] == null)
{
  site.Features.Add(pubprereqguid);
}

// Check if the 'Publishing Resources' feature is at the web and activated
var pubresguid = new Guid("AEBC918D-B20F-4a11-A1DB-9ED84D79C87E");
if (site.Features[pubresguid] == null)
{
  site.Features.Add(pubresguid);
}