Wordpress "http://localhost/removecookies" problem with mod_security

I was having a problem with Wordpress behaving badly all of a sudden. The site in question was hosted at eUKhost.com so I had a chat with Kieran, a technical guy there. This problem is not well documented on the internet so I thought I would post the transcript here:

The following is a transcript of your chat session.
General Info
Chat start time     Jun 12, 2009 3:34:06 PM EST
Chat end time     Jun 12, 2009 4:16:25 PM EST
Duration (actual chatting time)     00:42:19
Operator     Kieran
Chat Transcript
info: Please wait for a site operator to respond.
info: You are now chatting with 'Kieran'
Kieran: Hello and Welcome to Live Chat Support.
Kieran: How may I assist you today ?
Rick Lomas: Hi Kieran - I'm having a problem (again) with a wordpress blog I have on portisaaccottages.com - I was chatting to stuart about this the other day - is he about?
Kieran: May I know exact URL link and steps to check this issue ?
Rick Lomas: sure go to www.portisaaccottages.com/wp-login.php and login with usr=admin pwd=p810kfc
Kieran: Ok
Rick Lomas: then try and make a post and publish it
Kieran: Ok
Rick Lomas: you will be redirected to http://localhost/removecookies and the post will be saved as a draft
Kieran: Ok
Kieran: Give me a moment please. I am looking into this.
Rick Lomas: now apparantly this is NOT a wordpress problem but something to do with some "JavaScript injection protection filter" on the Apache installation
Kieran: Checking
Rick Lomas: With Stuart the other day, the same problem was on campervansdirect.co.uk and I think it got sorted, but I'm not sure how
Kieran: Ok, Hold on.
Rick Lomas: you still there mate?
Kieran: Yes
Kieran: Please allow me few minutes more.
Rick Lomas: sorry - please take your time -
Kieran: I have disabled mod_security for your site, But you will have to check your pluggin settings for Wordpress.
Rick Lomas: shall I give it a go? I think that was what stuart did the other day
Kieran: Stuart has just updated me about disable mod_security issue with WP.
Kieran: Wait
Kieran: Still checking.
Kieran: Are you there ?
Rick Lomas: yes
Kieran: Ok, Checking with stuart.
Kieran: Please check now.
Rick Lomas: looking good - so what should i do in the future if I encounter this?
Kieran: Just disable mod_security. Stuart has just corrected with new code.
Kieran: So now you will not face such problem again
Kieran: Is there anything else I may assist you with?
Rick Lomas: No that's all - thank you very very much
Kieran: You are welcome
Kieran: Have nice time ahead
Kieran: Bye
Kieran: As a part of our constant endeavor to provide you with quality service, we would appreciate a  feed back. Kindly fill in the Exit Survey form after you end this chat session. You may  also include your email address to get the chat transcript.
Rick Lomas: Take Care Kieran, have good weekend