Index: wp-includes/formatting.php
===================================================================
--- wp-includes/formatting.php	(revision 21841)
+++ wp-includes/formatting.php	(working copy)
@@ -2799,6 +2799,12 @@
 			$value = preg_replace('/[^a-zA-Z0-9_-]/', '', $value); // strips slashes
 			break;
 
+		case 'blog_public' :
+			// This is the value if the settings checkbox is not checked on POST. Don't rely on this.
+			if ( null === $value )
+				$value = 1;
+			break;
+
 		case 'date_format':
 		case 'time_format':
 		case 'mailserver_url':
Index: wp-admin/options.php
===================================================================
--- wp-admin/options.php	(revision 21841)
+++ wp-admin/options.php	(working copy)
@@ -136,14 +136,15 @@
 			if ( $unregistered )
 				_deprecated_argument( 'options.php', '2.7', sprintf( __( 'The <code>%1$s</code> setting is unregistered. Unregistered settings are deprecated. See http://codex.wordpress.org/Settings_API' ), $option, $option_page ) );
 
-			$option = trim($option);
+			$option = trim( $option );
 			$value = null;
-			if ( isset($_POST[$option]) )
-				$value = $_POST[$option];
-			if ( !is_array($value) )
-				$value = trim($value);
-			$value = stripslashes_deep($value);
-			update_option($option, $value);
+			if ( isset( $_POST[ $option ] ) ) {
+				$value = $_POST[ $option ];
+				if ( ! is_array( $value ) )
+					$value = trim( $value );
+				$value = stripslashes_deep( $value );
+			}
+			update_option( $option, $value );
 		}
 	}
 
Index: wp-admin/options-reading.php
===================================================================
--- wp-admin/options-reading.php	(revision 21841)
+++ wp-admin/options-reading.php	(working copy)
@@ -150,9 +150,9 @@
 	<p class="description"><?php _e( 'Note: Neither of these options blocks access to your site &mdash; it is up to search engines to honor your request.' ); ?></p>
 	<?php do_action('blog_privacy_selector'); ?>
 <?php else : ?>
-	<label for="blog_public"><input name="blog_public" type="checkbox" id="blog_public" value="1" <?php checked( '1', get_option( 'blog_public' ) ); ?> />
-	<?php _e( 'Allow search engines to index this site' ); ?>
-	<p class="description"><?php _e( 'It is up to search engines to honor a request to not index this site.' ); ?></p>
+	<label for="blog_public"><input name="blog_public" type="checkbox" id="blog_public" value="0" <?php checked( '0', get_option( 'blog_public' ) ); ?> />
+	<?php _e( 'Ask search engines to <strong>not index</strong> this site' ); ?></label>
+	<p class="description"><?php _e( 'It is up to search engines to honor this request.' ); ?></p>
 <?php endif; ?>
 </fieldset></td>
 </tr>