I found this post elsewhere:
http://wordpress.org/support/topic/133387?replies=5
in which a coder with my problem commented out the sanitize_option() function from wp-includes/formatting.php and the immediate error went away. I tried it with the same results.
Now two of us are crossing our fingers that this won’t cause another problem somewhere inside WP’s guts.
Update: this error occurs with any attempt to update options.
Update: this error occurs with any attempt to update options.
Works great for me, too! Thanks.