Index: wp-admin/ms-edit.php
===================================================================
--- wp-admin/ms-edit.php	(revision 13398)
+++ wp-admin/ms-edit.php	(working copy)
@@ -537,7 +537,7 @@
 			wp_die( __('Missing email.') );
 
 		$password = wp_generate_password();
-		$user_id = wpmu_create_user(wp_specialchars( strtolower( $user['username'] ) ), $password, esc_html( $user['email'] ) );
+		$user_id = wpmu_create_user( esc_html( strtolower( $user['username'] ) ), $password, esc_html( $user['email'] ) );
 
 		if ( false == $user_id )
  			wp_die( __('Duplicated username or email address.') );
Index: wp-includes/default-filters.php
===================================================================
--- wp-includes/default-filters.php	(revision 13398)
+++ wp-includes/default-filters.php	(working copy)
@@ -147,7 +147,7 @@
 
 // Misc filters
 add_filter( 'option_ping_sites',    'privacy_ping_filter'                 );
-add_filter( 'option_blog_charset',  '_wp_specialchars'                    ); // IMPORTANT: This must not be wp_specialchars() or esc_html() or it'll cause an infinite loop
+add_filter( 'option_blog_charset',  '_wp_specialchars'                    ); // IMPORTANT: This must not be esc_html() or it'll cause an infinite loop
 add_filter( 'option_home',          '_config_wp_home'                     );
 add_filter( 'option_siteurl',       '_config_wp_siteurl'                  );
 add_filter( 'tiny_mce_before_init', '_mce_set_direction'                  );