[DiapDealer]

Kovid's explanation of what happened is correct. It documents what happened from 0.7.2 to 0.7.4.

If, however (for the O.P.), your source does not make use of any non-breaking space characters (which it seems like it doesn't), 0.7.2 isn't going to cause you any issues in that regard. Your nbsp entities are safe.

0.7.3 was an attempt to fix the issue, but unfortunately introduced the problem where xhtml without a doctype (valid xhtml, mind you) was being invalidated by converting the non-breaking space characters to entities (with no regard for whether that conversion needed a DTD present to be valid).

0.7.4 was released to alleviate the doctype conundrum that 0.7.3 unwittingly introduced.

@Kovid. Any quick pointers to examples of the QPlainTextEdit subclass method overrides you mentioned? I've not even peeked yet at your code for calibre's edit-book, so even a file-name to get me in the right locale would be considered a great boon.