I fixed a bug where the encode_entities option wasn't getting passed in to loops' sub-templates. An updated patch available here. The regression suite was updated, of course. :)
Comment on Re: ISO-8859-1 support for HTML::Template
It's doubly embarrasing when the guy finding the bug sits next to you at work, and that he uses the excuse of finding the bug to finally get a Perlmonks account. Good catch nonetheless. Props also to blakem for co-discovery.