If you don't already know, magic_quotes_gpc has been fully disabled in PHP 5.2.7, whether you set it to being enabled or not. Not that you should be relying on it but some legacy applications may still be using it and such. It's even fully deprecated in PHP 6.0.0 but yeah... You catch the drift.

Anyways, the bug has been fixed in the latest CVS so grab a snapshot if you compile from it. If you can wait, PHP 5.2.8 releases next week.