diff --git a/examples/playbooks/playbook4.yml b/examples/playbooks/playbook4.yml
index 7fb6673cb0d..62cc0bc1cff 100644
--- a/examples/playbooks/playbook4.yml
+++ b/examples/playbooks/playbook4.yml
@@ -9,17 +9,39 @@
      favcolor: "red"
      ssn: 8675309
 
+# Below we're going to define some expressions.
+#
+# Not only can we assign variables for reuse, but we can also assign conditional
+# expressions.  By keeping these in 'vars', the task section remains
+# extraordinarily clean, and not littered with programming language
+# constructs -- so it's easily skimmed by humans.
+#
+# Remember to quote any variables if they are not numbers!  
+#
+# Interesting fact: aside from the $variables, these expressions are actually 
+# tiny bits of Python.  They are evaluated in the context of each host, so different
+# steps can be skipped on different hosts!  They should evaluate to either True
+# or False
+
+     is_favcolor_blue: "'$favcolor' == 'blue'"
+#     is_centos: "'$facter_operatingsystem' == 'CentOS'"
+
+# NOTE:
+#
 # facter and ohai variables can be used in only_if statements too
-# ex:  "$facter_operatingsystem == 'CentOS'", which bubble up automatically
+# ex:  "'$facter_operatingsystem' == 'CentOS'", which bubble up automatically
 # from the managed machines
+#
+# this example won't do that though, as you might not have facter or ohai,
+# but you get the idea...
 
   tasks:
 
      - name: "do this if my favcolor is blue"
        action: shell /bin/false
-       only_if: "'$favcolor' == 'blue'"
+       only_if: '$is_favcolor_blue'
      
-     - name: "do this if my favcolor is red"
-       action: shell /bin/false
-       only_if: "'$favcolor' == 'red'"
+     - name: "do this if my favcolor is not blue"
+       action: shell /bin/true
+       only_if: 'not ($is_favcolor_blue)'
 
diff --git a/lib/ansible/runner.py b/lib/ansible/runner.py
index 0607bd39188..3e11700fdae 100755
--- a/lib/ansible/runner.py
+++ b/lib/ansible/runner.py
@@ -27,6 +27,7 @@ import random
 import traceback
 import tempfile
 import subprocess
+import urllib
 
 import ansible.constants as C 
 import ansible.connection
@@ -295,16 +296,26 @@ class Runner(object):
 
         args = module_args
         if type(args) == list:
-            args = " ".join([ str(x) for x in module_args ])
-        
+            if remote_module_path.endswith('setup'):
+                # briefly converting arguments to strings before file transfer
+                # causes some translation errors.  This is a workaround only
+                # needed for the setup module
+                args = " ".join([ "\"%s\"" % str(x) for x in module_args ])
+            else:        
+	        args = " ".join([ str(x) for x in module_args ])
+
         # by default the args to substitute in the action line are those from the setup cache
         inject_vars = self.setup_cache.get(conn.host,{})
         
         # see if we really need to run this or not...
-        conditional = utils.template(self.conditionally_execute_if, inject_vars)
-        if not eval(conditional):
-            return utils.smjson(dict(skipped=True))
+        # doubly templated so we can store a conditional expression in a variable!
+        conditional = utils.template(
+            utils.template(self.conditionally_execute_if, inject_vars),
+            inject_vars
+        )
 
+        if not eval(conditional):
+            return [ utils.smjson(dict(skipped=True)), 'skipped' ]
 
         # if the host file was an external script, execute it with the hostname
         # as a first parameter to get the variables to use for the host
@@ -333,7 +344,7 @@ class Runner(object):
                 if not k.startswith('facter_') and not k.startswith('ohai_'):
                     if str(v).find(" ") != -1:
                         v = "\"%s\"" % v
-                    args += " %s=%s" % (k, v)
+                args += " %s=%s" % (k, str(v).replace(" ","~~~"))
 
         # the metadata location for the setup module is transparently managed
         # since it's an 'internals' module, kind of a black box. See playbook
diff --git a/library/setup b/library/setup
index 6ab82f1a9d0..a2b90b7400d 100755
--- a/library/setup
+++ b/library/setup
@@ -33,12 +33,18 @@ except ImportError:
 
 if len(sys.argv) == 1:
     sys.exit(1)
+
 argfile = sys.argv[1]
 if not os.path.exists(argfile):
     sys.exit(1)
+
 input_data = shlex.split(open(argfile, 'r').read())
 
-new_options = dict([ x.split('=') for x in input_data ])
+# turn urlencoded k=v string (space delimited) to regular k=v directionary
+splitted = [x.split('=',1) for x in input_data ]
+splitted = [ (x[0], x[1].replace("~~~"," ")) for x in splitted ]
+new_options = dict(splitted)
+
 ansible_file = new_options.get('metadata', DEFAULT_ANSIBLE_SETUP)
 ansible_dir = os.path.dirname(ansible_file)
 
diff --git a/test/playbook1.events b/test/playbook1.events
index a4385a7d8fd..993b069d813 100644
--- a/test/playbook1.events
+++ b/test/playbook1.events
@@ -263,4 +263,3 @@
         }
     }
 }
-