=== modified file 'codefilter.module'
--- codefilter.module	2008-03-23 21:27:20 +0000
+++ codefilter.module	2008-03-24 16:12:41 +0000
@@ -80,7 +80,7 @@ function codefilter_process_code($text) 
 }
 
 function codefilter_fix_spaces($text) {
-  return preg_replace('@ (?! )@', ' ', $text);
+  return preg_replace('@(?<!^|<br />|<br&nbsp;/>\n)&nbsp;(?!&nbsp;)@', ' ', $text);
 }
 
 /**