bug#2416: 23.0.60; decode-coding-region

I have been having this problem since I switched to Emacs 23 several
weeks ago. I'm using VM to read my mails. There seems to be a problem
in decode-coding-region when VM tries to decode a string. When VM
tries to decode a region or a string, it uses a temporary buffer and
basically runs the following lisp code:

(apply 'decode-coding-region (point-min) (point-max)  'us-ascii nil)

The original buffer  content would be something like this:

B7040400-12
some text here

after decode-coding-region is executed, the buffer content became:

^@7040450-12
some text here

Where ^@ is actually binary code \0 (not ascii ^ and @). There is another instance
that a string was decoded and the result is  ^@ prefixed. 

I could not reproduce this with "Emacs -Q". But it always happens when
thsoe particular messages were processed by VM. 

Strangely enough, if I inserted a few spaces at the beginning of
buffer: (one space in the following buffer)

 B7040400-12
some text here

And, the decoding was done correctly. In another instance mentioned
above, one space is not enough. I had to put several spaces to get the
decoding working. 

I saw another bug report just yesterday regarding decode-coding-region
crashing. I applied the patch, but it did not help in the
decoding. 

Please let me know if you need other information to help understand
the problem. Thanks. 

-----
Emacs version: "GNU Emacs 23.0.60.1 (i386-mingw-nt5.1.2600) of 2009-01-29 on T42"

Windowing system distributor `Microsoft Corp.', version 5.1.2600
configured using `configure --with-gcc (3.4) --cflags -I../../GnuWin32/include'

Important settings:
  value of $LC_ALL: nil
  value of $LC_COLLATE: nil
  value of $LC_CTYPE: nil
  value of $LC_MESSAGES: nil
  value of $LC_MONETARY: nil
  value of $LC_NUMERIC: nil
  value of $LC_TIME: nil
  value of $LANG: ENU
  value of $XMODIFIERS: nil
  locale-coding-system: chinese-big5
  default-enable-multibyte-characters: t

Major mode: Shell

Minor modes in effect:
  auto-image-file-mode: t
  shell-dirtrack-mode: t
  tooltip-mode: t
  mouse-wheel-mode: t
  menu-bar-mode: t
  file-name-shadow-mode: t
  global-font-lock-mode: t
  font-lock-mode: t
  global-auto-composition-mode: t
  auto-composition-mode: t
  auto-encryption-mode: t
  auto-compression-mode: t
  line-number-mode: t
  transient-mark-mode: t