A: 

I ran into a similar issue with ampersands (&) and html tags. It looks like the plugin converts everything to html entities. Because of this, html tags and entities actually show up. For example, &amp; gets converted to &amp;amp; and appears as &amp; instead of & and <br /> gets converted to &lt;br /&gt; and appears as <br /> instead of a break. You could modify htmlEscape() (ln 3368 of version 1.4.5) to just return s. You could also setup an eventRender callback as follows:

eventRender: function(event, element) {
  $('.fc-event-title', element).html(event.content);
}

While a little redundant, these ensures that it won't be broken for you in future versions.

I have filed an issue with the maintainer at http://code.google.com/p/fullcalendar/issues/detail?id=400.

JamesArmes
A: 
Nemi