Index: wp-includes/functions.php
===================================================================
--- wp-includes/functions.php	(revision 11274)
+++ wp-includes/functions.php	(working copy)
@@ -1325,13 +1325,12 @@
  * @param array $array Array to used to walk while sanitizing contents.
  * @return array Sanitized $array.
  */
-function add_magic_quotes( $array ) {
+function add_magic_quotes( $array, $donottouch=array() ) {
 	global $wpdb;
-
 	foreach ( (array) $array as $k => $v ) {
 		if ( is_array( $v ) ) {
 			$array[$k] = add_magic_quotes( $v );
-		} else {
+		} elseif ( !in_array($k, $donottouch) ) {
 			$array[$k] = $wpdb->escape( $v );
 		}
 	}
Index: wp-settings.php
===================================================================
--- wp-settings.php	(revision 11274)
+++ wp-settings.php	(working copy)
@@ -582,7 +582,7 @@
 
 // Escape with wpdb.
 $_GET    = add_magic_quotes($_GET   );
-$_POST   = add_magic_quotes($_POST  );
+$_POST   = add_magic_quotes($_POST, $donottouch=array('pwd','pass1','pass2') );
 $_COOKIE = add_magic_quotes($_COOKIE);
 $_SERVER = add_magic_quotes($_SERVER);
 
Index: wp-admin/includes/user.php
===================================================================
--- wp-admin/includes/user.php	(revision 11274)
+++ wp-admin/includes/user.php	(working copy)
@@ -148,10 +148,6 @@
 			$errors->add( 'pass', __( '<strong>ERROR</strong>: Please enter your password twice.' ), array( 'form-field' => 'pass2' ) );
 	}
 
-	/* Check for "\" in password */
-	if( strpos( " ".$pass1, "\\" ) )
-		$errors->add( 'pass', __( '<strong>ERROR</strong>: Passwords may not contain the character "\\".' ), array( 'form-field' => 'pass1' ) );
-
 	/* checking the password has been typed twice the same */
 	if ( $pass1 != $pass2 )
 		$errors->add( 'pass', __( '<strong>ERROR</strong>: Please enter the same password in the two password fields.' ), array( 'form-field' => 'pass1' ) );