In the Safari 4 Developer Preview   entities are converted HTML enties, which are obviously invalid in XML. I noticed because the XSLT processor choked on them. This occurs when loading files using XMLHttpRequest, loading XML from strings using DOMParser, but they are even (re)introduced using importNode.
Created attachment 22112 [details] The bug will result in an entity being shown instead of a space
Apple beta/prototype software that is under NDA should not be discussed in Bugzilla, the only way to report bugs about it is via <http://bugreport.apple.com>. However, this bug is in WebKit, so it was present in nightly builds as well, and was already fixed. You can get a nightly build from <http://nightly.webkit.org>, using it will not affect your OS installation in any way. *** This bug has been marked as a duplicate of 19215 ***