Index: wp-includes/query.php
===================================================================
--- wp-includes/query.php	(revision 17206)
+++ wp-includes/query.php	(working copy)
@@ -2038,7 +2038,7 @@
 		// If a search pattern is specified, load the posts that match
 		if ( !empty($q['s']) ) {
 			// added slashes screw with quote grouping when done early, so done later
-			$q['s'] = stripslashes($q['s']);
+			$q['s'] = urldecode( stripslashes($q['s']) );
 			if ( !empty($q['sentence']) ) {
 				$q['search_terms'] = array($q['s']);
 			} else {