Noticed this in 1.0.1, but apparently it is present in the 1.0 code as well, and has not been addressed in the latest nightlies.
So in xmlrpc.php, the wp_insert_post needs to be modified with
$post_name = sanitize_title($post_title);
and the insert query needs to be modified with post_name
(post_author, post_date, post_content, post_title, post_excerpt, post_category, post_status, post_name) VALUES('$post_author','$post_date','$post_content','$post_title', '$post_excerpt','$post_cat', '$post_status','$post_name')";
I noticed this when using Bloggar to add a post to my blog and the dashed title wasn't showing up in the url.