Before I post, I have another thought. I just got a blog comment notice sent to my email and it is now also showing the ascii character, but only in the sender field (Girls Can’t WHAT? shows up properly formatted in the subject line). It used to show the sender as ‘WordPress’. Now I’m not sure if this is a buddypress issue or because I updated WordPress right before I installed buddypress. Any clues?
I just installed BuddyPress today and encountered this. A did a little digging and found it was using the “nicename” for the url. I went in to the users db via phpmyadmin and changed the nicename to ‘admin’ and now it’s working.