Binary strings (set with xmlrpc_set_type) go into a <base64>...</base64> block like you'd expect. But after every 80th character, this function inserts the XML entity " ", which is a Unicode newline, as if to cause a line-wrap, which is admittedly silly.
Silly though it may be, it causes real problems for some XML-RPC servers, such as http://jakarta.apache.org/xmlrpc/ (nee Helma). Stripping out those entities with something like
$req = preg_replace('/ /', '', xmlrpc_encode_request("my.method", $args));
works around the problem.