Ok, I might have been to brief.
I have an application posting the string "var=hello%00world" to a script:
<?php
print $HTTP_POST_VARS["var"];
?>
And the "var" gets trucated at the NULL character.
(I've tried it with and without magic_quotes_gpc)

are you sure they get truncated?
please echo strlen($HTTP_POST_VARS["var"]) *before* the
other output and please don't use NS 4.x it is known to
truncate an unknown number of bytes after a \0 string,
NS6,IE will work...

maybe duplicate of 7621

Here is a short script that shows the problem. (I guess I should have posted thins in my first bugreport, sorry)
The script null_string.php gets called with:
http://myserver.com/null_string.php?truncated=hello%00world

null_string.php:
<?php
$works= "hello\x00world";
$fp = fopen("file.txt","w");
fwrite($fp,"$works\n");
fwrite($fp,"$truncated\n");
fclose($fp);
?>

file.txt opened in an hex editor:

hex: 68 65 6C 6C 6F 00 77 6F-72 6C 64 0A 68 65 6C 6C 6F 0A
text:hello.world.hello.

The $works is saved with the null value, but the $truncated in the get request gets truncated by php.

Ok, I found this in:
php_variables.c row 202
/* FIXME: XXX: not binary safe, discards returned length */
php_url_decode(var, strlen(var));
php_url_decode(val, strlen(val));
php_register_variable(var, val, array_ptr ELS_CC PLS_CC);

So I guess you are already aware of the problem.

Fixed in CVS.