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HTML visualforce email template

I've created a visualforce email template from the wiki. However the email recieved comes in HTML however it shows the html code, like the tags where in text.  See below for the examples of what it looks like.


This is how the idea looks:

This is how the email looks:


Anyone have an idea about this?

Rasmus MenckeRasmus Mencke
we escape all html characters in the output of the merge field, so if the body includes html characters like <b> it will print those characters.