So I went to post a source code snippet and kept getting this
<img src="http://s1.wp.com/wp-includes/images/smilies/icon_surprised.gif?m=1268811515g" alt=":o" class="wp-smiley">
Whenever I had :o in my examples. Say for a ruby on rails :order example.
Turns out smilies can be disabled blog wide. I would just expect wordpress to not parse ‘smilies’ in my sourcecode blocks.