The change from 7328 to 7329 involves a fairly extensive makeover of the postgres database adapter. In this change the handling of bytea fields was modified and is now broken.
I posted this issue to my blog and received this response:
The regexp should be /\\\d{3}/ not /\\\\\d{3}/ as it is in both cases.
A bit of tinkering has shown me the main use for byteas (images) often have a \ followed by a character that requires encoding so they generally match the original regexp and therefore nothing is noticed.
blog post is here:
http://www.justinball.com/2007/09/17/edge-rails-openid-and-the-dreaded-sorry-the-openid-verification-failed-error/