Wiltshire college are going over to full names for their email addresses, and have some with apostrophes in them.
The relevant email RFCs say that apostrophes are valid in email addresses.
The have a user with an email address of Helen.O'Brien@wiltshire.ac.uk
This is, as far as I can see, a valid email address within the meaning of the RFC.
It seems to store in moodle OK, and if viewed from the user's profile page, displays correctly. But when it is actually used as an email destination, the escape character doesn't seem to be removed, so you get the following, which then prompts a "unknown recipient" error from the mail server:
Received: from estudy.wiltscoll.ac.uk (172.19.1.11) by trxcas.wiltscoll.ac.uk
(172.19.1.18) with Microsoft SMTP Server id 188.8.131.52; Tue, 16 Sep 2008
Date: Tue, 16 Sep 2008 09:49:46 +0100
To: Helen O'Brien <Helen.O\'Brien@wiltshire.ac.uk>
From: Ed Study <eStudy@wiltscoll.ac.uk>
Subject: Confirmation of email update at eStudy
X-Mailer: PHPMailer [version Moodle 2007101520]
Content-Type: text/plain; charset="UTF-8"
Looks like whatever is used to strip out the escape characters for display hasn't been put in for email.