The bug you mention is more of a limitation of vBulletin itself. In order to "fix" the max characters issue (I have done this on my site), you should alter the db fields for those profile fields. I believe they are set to VARCHAR(255). If you have MySQL 5 you can set the VARCHAR higher I think, but I just changed the fields to MEDIUMTEXT.
I will look at Psionic's mod one of these days and see what you are referring to... but honestly as long as script tags and comment tags exist, or the ability to define new HTML tags, I don't think there is a truly safe way to allow HTML.
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