I updated to the latest Pligg Beta Build 728 this morning. I'm using URLMethod2 and FriendlyURLs. I also have category names which include spaces, e.g. British Politics.
I submitted a test post containing several special chars to test the "Punctuation not stripped for story title" fix - it is indeed fixed as far as I can tell.
However what I have noticed is that the breadcrumb URLMethod2 permalink on individual story pages returns a 404 error because the URL has a space in the category part, e.g. http://www.mysite/British Politics/Story-Title/. The 'read more' and 'discuss' URLs are correct, i.e. http://www.mysite/BritishPolitics/Story-Title/ - no space in the category name 'British Politics'. It's only the breadcrumb link which contains the space in the permalink URL. I didn't notice this behaviour in Build 702.