Why are escape characters being added to the value of the hidden input

Answer 1

I believe the problem is just one of escaping done by the tools you are using to output the string. For example:

var msg = dojo.toJson({field1: 'string', field2: 84, field3: 'another string'});
alert(msg);

will show the double quotes as unescaped. Similarly, running your first example while the browser is hooked up to a proxy like Charles, shows the double qoutes as unescaped.

So I believe this is just an auto-escape that Firebug/PHP does when showing you strings.