.psql_history file is messed up and control-r does not work

My .psql_history contains lines of the  form.

select\040sum(price)\040from\040products\040p\040join\040

My psql client is 9.1.2 on Mac OS and server is linux 9.0.5

Is the version mismatch messing up this .psql_history file?

Also control-r to search the history isn't working at psql prompt from
Mac although it does work if I log in to server where client and
server are the same version.

Thanks for any assistance in this issue.

mr. wu