Version:            (using KDE KDE 3.1.3)
Installed from:    RedHat RPMs
OS:          Linux

If I have a URL on the page such as:
mydomain.com/Pictures%20Of%20My%20Wedding

If I select Copy Link Location from the context menu, what is copied is:
mydomain.com/Pictures Of My Wedding

Then, when I paste this to other applications, this is cause for trouble -- for example if I paste to an email, all email readers would truncate the URL at the first space, thus the email recipient will not be able to open the link (unless he knows that he can paste the rest of the worlds to the location bar, which is not always obvious).

Same happens when copying URL from Location bar.

Testing in Mozilla, it keeps the URL properly encoded with %20. Even better, if the HTML is <a href="hello world"> it will still paste hello%20world.

This may or may not be a problem with other special characters as well, have not tested for those.