diff -ruN wordpress.orig/wp-admin/includes/user.php wordpress/wp-admin/includes/user.php
--- wordpress.orig/wp-admin/includes/user.php	2008-03-15 19:02:16.000000000 +0200
+++ wordpress/wp-admin/includes/user.php	2008-06-28 15:11:16.000000000 +0300
@@ -39,6 +39,11 @@
 	if ( isset( $_POST['pass2'] ))
 		$pass2 = $_POST['pass2'];
 
+	if (get_magic_quotes_gpc()) {
+		$pass1 = stripslashes($pass1);
+		$pass2 = stripslashes($pass2);
+	}
+
 	if ( isset( $_POST['role'] ) && current_user_can( 'edit_users' ) ) {
 		if( $user_id != $current_user->id || $wp_roles->role_objects[$_POST['role']]->has_cap( 'edit_users' ))
 			$user->role = $_POST['role'];
diff -ruN wordpress.orig/wp-includes/user.php wordpress/wp-includes/user.php
--- wordpress.orig/wp-includes/user.php	2008-04-21 22:47:53.000000000 +0300
+++ wordpress/wp-includes/user.php	2008-06-28 15:12:50.000000000 +0300
@@ -19,6 +19,9 @@
 	else
 		$credentials['remember'] = false;
 
+	if ( get_magic_quotes_gpc() )
+		$credentials['user_password'] = stripslashes($credentials['user_password']);
+
 	do_action_ref_array('wp_authenticate', array(&$credentials['user_login'], &$credentials['user_password']));
 
 	// If no credential info provided, check cookie.