Sorry, disabling plugins didn't help.
Odd. Any chance you could post a thread in Private Inquiries with details of a demo admin account and URL so I can take a further look?
This issue has been resolved.
I turned magic_quotes_gpc ON and then OFF again and the problem disappeared!
Thanks goes to everyone tried to help.
That's an odd one. I did think it was related to magicquotes, but I have no idea why doing the above would fix the issue.