you can work around this issue with something like this:
<?php echo preg_replace('/\\\"/','"',wp_list_bookmarks('title_before=<div style="background:transparent url(/blog/wp-content/themes/digitalbugsy/images/sideBarTitleBar.gif) bottom left no-repeat; padding:12px; font-size:18px; width:216px; margin:0px;">&title_after=</div>&category_before=&category_after=&show_description=1&echo=0'); ?>
this way wp_list_bookmarks() doesn’t echo the list but returns it to the template where you can use a regular expression to replace \” with a simple “
enjoy
