Search not working properly Only First Word in a search is passed

I have a weird problem. I am using a multi-site installation. I inherited the setup and while I think the problem is in the setup, I am perplexed. The .htaccess file has 4 sites in the form:

RewriteCond %{SERVER_NAME} ^mysite.mysite1.domain.com$ [NC]
RewriteCond %{REQUEST_FILENAME} !-f
RewriteCond %{REQUEST_FILENAME} !-d
RewriteCond %{REQUEST_URI} !=/favicon.ico
RewriteRule ^(.*)$ http://mysite.mysite1.domain.com/index.php?q=$1 [P,L,QSA]

I am using Virtual hosts and that conf is:

ServerName mysite.mysite1.domain.com
DocumentRoot /home/drupal/version6/production
AllowOverride all

The search only passes one term. It stops at the space. So if I type in widgets color, only the widgets is searched. The site works fine except for that. I am using clean urls. If I remove the -P flag, then the search works, but the sort search feature breaks and the clean urls go away. If I type widgets%20color - then the search works properly. I've searched for solutions, but can't find any.