TinyMCE Editor has a code clean-up function which tries to clean html code while saving articles. This removes all non-braking spaces regardless of the way they were entered – Spacebar, TinyMCE Insert non-breaking space character button , or even   directly in html mode.

To stop this behaviour head to Extensions > Plugin Manager > Editor – TinyMCE
In plugin parameters set:
Code Cleanup on Startup: Off
Code cleanup on save: Never

Joomla 1.5