The support for spaces in pathnames in MSWin isn't really debateable.

Oh yes, it is very much debatable. Perl is *FAR* from being the only thing that has trouble with pathnames that include spaces (and other bizzarroid characters that clearly don't belong in pathnames). Many third-party GUI applications get this wrong, because support for it was not retrofitted properly into all of the parts of the API; only the *new* parts of the API (err, new in 1995) can be relied upon to support them correctly, and even then there are a number of gotchas. As of Windows 98 SE, even Windows Explorer did not handle this correctly in some of the wackier edge cases, particularly having to do with associations and drag-and-drop actions. (I haven't tested this in Windows XP, mainly because these days I don't use Windows enough to have run across it.)

I agree that the error message should probably be more clear and ideally should list specific things that might break. But in essense it is right: installing something as complex and command-line-oriented as Perl into a path that contains spaces is not really a very good idea.