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Imported From: http://groups.google.com/group/in-portal-bugs/browse_thread/thread/a8b2e1c788316ffc#

When you specify "la-la" as State and "United States" as Country while
adding new user into administrative console, then no error is raised. When
you try to register on front-end then invalid state will be reported as
error. We need to review all other places, where you enter countries and
states. General approach for fixing would be to move validation to
OnBefore... events from OnCreate/OnUpdate events.

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