Index: wp-admin/edit-link-form.php
===================================================================
--- wp-admin/edit-link-form.php	(revision 11110)
+++ wp-admin/edit-link-form.php	(working copy)
@@ -383,7 +383,7 @@
 <h3><label for="link_url"><?php _e('Web Address') ?></label></h3>
 <div class="inside">
 	<input type="text" name="link_url" size="30" class="code" tabindex="1" value="<?php echo attr($link->link_url); ?>" id="link_url" />
-    <p><?php _e('Example: <code>http://wordpress.org/</code> &#8212; don&#8217;t forget the <code>http://</code>'); ?></p>
+   	<p><?php _e('Example: <code>&#35;anchor</code> or <code>http://wordpress.org/</code> &#8212; don&#8217;t forget the <code>http://</code>'); ?></p>
 </div>
 </div>
 
Index: wp-includes/formatting.php
===================================================================
--- wp-includes/formatting.php	(revision 11110)
+++ wp-includes/formatting.php	(working copy)
@@ -2004,7 +2004,7 @@
 	 * link starting with / or a php file).
 	 */
 	if ( strpos($url, ':') === false &&
-		substr( $url, 0, 1 ) != '/' && !preg_match('/^[a-z0-9-]+?\.php/i', $url) )
+		substr( $url, 0, 1 ) != '/' && substr( $url, 0, 1 ) != '#' && !preg_match('/^[a-z0-9-]+?\.php/i', $url) )
 		$url = 'http://' . $url;
 
 	// Replace ampersands and single quotes only when displaying.