RSS1 and RSS2 encoding problem

Hi there,
I’ve noticed a funny way that WP is working with HTML entities, which is cuasing a problem with RSS1 syndication. In short, when a user post an entry all regular quotes (“) are converted to smart quotes (the curly ones) and then converted to their HTML entity equivalent, e.g. “ or ”.
However, in the RSS1 feed, the quotes ARE converted to the smart version, but they ARE NOT encoded as their HTML entity equivalent. Where we’re using zFeeder to pull the RSS1 onto the site’s main page, these smart characters are showing up as question marks and other funny characters.
Any help appreciated!
Phillip.