If I have a blog with single quotes in the title, e.g. "David's Test Blog", and create a post called "David's Test Post", the subject of the email sent out is "David's Test Blog: David's Test Post".
To fix this, I have made a change to the function post_notification_create_email() at line 20 of sendmail.php
Orginally there was
function post_notification_create_email($id, $template = ''){
$blogname = get_option('blogname');
Which I have changed to
function post_notification_create_email($id, $template = ''){
// The blogname option is escaped with esc_html on the way into the database in sanitize_option
// we want to reverse this for the plain text arena of emails.
$blogname = wp_specialchars_decode(get_option('blogname'), ENT_QUOTES);
I hope this helps someone,
David