diff --git a/app/controllers/todos_controller.rb b/app/controllers/todos_controller.rb
index 70f149b2..09b89aaa 100644
--- a/app/controllers/todos_controller.rb
+++ b/app/controllers/todos_controller.rb
@@ -231,7 +231,9 @@ class TodosController < ApplicationController
       @todo.activate!
     end
     
-    @saved = @todo.update_attributes params["todo"]
+    @todo.attributes = params["todo"]
+    @saved = @todo.save
+
     @context_changed = @original_item_context_id != @todo.context_id
     @todo_was_activated_from_deferred_state = @original_item_was_deferred && @todo.active?
     
diff --git a/app/models/todo.rb b/app/models/todo.rb
index 97a1b984..ffeeaa5e 100644
--- a/app/models/todo.rb
+++ b/app/models/todo.rb
@@ -1,176 +1,186 @@
-class Todo < ActiveRecord::Base
-
-  belongs_to :context
-  belongs_to :project
-  belongs_to :user
-  belongs_to :recurring_todo
-
-  named_scope :active, :conditions => { :state => 'active' }
-  named_scope :not_completed, :conditions =>  ['NOT state = ? ', 'completed']
-  named_scope :are_due, :conditions => ['NOT todos.due IS NULL']
-
-  STARRED_TAG_NAME = "starred"
-  
-  acts_as_state_machine :initial => :active, :column => 'state'
-  
-  # when entering active state, also remove completed_at date. Looks like :exit
-  # of state completed is not run, see #679
-  state :active, :enter => Proc.new { |t| t[:show_from], t.completed_at = nil, nil }
-  state :project_hidden
-  state :completed, :enter => Proc.new { |t| t.completed_at = Time.zone.now }, :exit => Proc.new { |t| t.completed_at = nil }
-  state :deferred
-
-  event :defer do
-    transitions :to => :deferred, :from => [:active]
-  end
-  
-  event :complete do
-    transitions :to => :completed, :from => [:active, :project_hidden, :deferred]
-  end
-  
-  event :activate do
-    transitions :to => :active, :from => [:project_hidden, :completed, :deferred]
-  end
-    
-  event :hide do
-    transitions :to => :project_hidden, :from => [:active, :deferred]
-  end
-  
-  event :unhide do
-    transitions :to => :deferred, :from => [:project_hidden], :guard => Proc.new{|t| !t.show_from.blank? }
-    transitions :to => :active, :from => [:project_hidden]
-  end
-    
-  attr_protected :user
-
-  # Description field can't be empty, and must be < 100 bytes Notes must be <
-  # 60,000 bytes (65,000 actually, but I'm being cautious)
-  validates_presence_of :description
-  validates_length_of :description, :maximum => 100
-  validates_length_of :notes, :maximum => 60000, :allow_nil => true 
-  validates_presence_of :show_from, :if => :deferred?
-  validates_presence_of :context
-  
-  def validate
-    if !show_from.blank? && show_from < user.date
-      errors.add("show_from", "must be a date in the future")
-    end
-  end
-  
-  def toggle_completion!
-    saved = false
-    if completed?
-      saved = activate!
-    else
-      saved = complete!
-    end
-    return saved
-  end
-  
-  def show_from
-    self[:show_from]
-  end
-  
-  def show_from=(date)
-    # parse Date objects into the proper timezone
-    date = user.at_midnight(date) if (date.is_a? Date)
-    activate! if deferred? && date.blank?
-    defer! if active? && !date.blank? && date > user.date
-    self[:show_from] = date 
-  end
-
-  alias_method :original_project, :project
-
-  def project
-    original_project.nil? ? Project.null_object : original_project
-  end
-  
-  alias_method :original_set_initial_state, :set_initial_state
-  
-  def set_initial_state
-    if show_from && (show_from > user.date)
-      write_attribute self.class.state_column, 'deferred'
-    else
-      original_set_initial_state
-    end
-  end
-  
-  alias_method :original_run_initial_state_actions, :run_initial_state_actions
-  
-  def run_initial_state_actions
-    # only run the initial state actions if the standard initial state hasn't
-    # been changed
-    if self.class.initial_state.to_sym == current_state
-      original_run_initial_state_actions
-    end
-  end
-
-  def self.feed_options(user)
-    {
-      :title => 'Tracks Actions',
-      :description => "Actions for #{user.display_name}"
-    }
-  end
-  
-  def starred?
-    tags.any? {|tag| tag.name == STARRED_TAG_NAME}
-  end
-  
-  def toggle_star!
-    if starred?
-      _remove_tags STARRED_TAG_NAME
-      tags.reload
-    else
-      _add_tags(STARRED_TAG_NAME)
-      tags.reload
-    end 
-    starred?  
-  end
-
-  def from_recurring_todo?
-    return self.recurring_todo_id != nil
-  end
-  
-  # Rich Todo API
-  
-  def self.from_rich_message(user, default_context_id, description, notes)
-    fields = description.match(/([^>@]*)@?([^>]*)>?(.*)/)
-    description = fields[1].strip
-    context = fields[2].strip
-    project = fields[3].strip
-    
-    context = nil if context == ""
-    project = nil if project == ""
-
-    context_id = default_context_id
-    unless(context.nil?)
-      found_context = user.active_contexts.find_by_namepart(context)
-      found_context = user.contexts.find_by_namepart(context) if found_context.nil?
-      context_id = found_context.id unless found_context.nil?
-    end
-    
-    unless user.contexts.exists? context_id
-      raise(CannotAccessContext, "Cannot access a context that does not belong to this user.")
-    end
-    
-    project_id = nil
-    unless(project.blank?)
-      if(project[0..3].downcase == "new:")
-        found_project = user.projects.build
-        found_project.name = project[4..255+4].strip
-        found_project.save!
-      else
-        found_project = user.active_projects.find_by_namepart(project)
-        found_project = user.projects.find_by_namepart(project) if found_project.nil?
-      end
-      project_id = found_project.id unless found_project.nil?
-    end
-    
-    todo = user.todos.build
-    todo.description = description
-    todo.notes = notes
-    todo.context_id = context_id
-    todo.project_id = project_id unless project_id.nil?
-    return todo
-  end
-end
+class Todo < ActiveRecord::Base
+
+  belongs_to :context
+  belongs_to :project
+  belongs_to :user
+  belongs_to :recurring_todo
+
+  named_scope :active, :conditions => { :state => 'active' }
+  named_scope :not_completed, :conditions =>  ['NOT state = ? ', 'completed']
+  named_scope :are_due, :conditions => ['NOT todos.due IS NULL']
+
+  STARRED_TAG_NAME = "starred"
+  
+  acts_as_state_machine :initial => :active, :column => 'state'
+  
+  # when entering active state, also remove completed_at date. Looks like :exit
+  # of state completed is not run, see #679
+  state :active, :enter => Proc.new { |t| t[:show_from], t.completed_at = nil, nil }
+  state :project_hidden
+  state :completed, :enter => Proc.new { |t| t.completed_at = Time.zone.now }, :exit => Proc.new { |t| t.completed_at = nil }
+  state :deferred
+
+  event :defer do
+    transitions :to => :deferred, :from => [:active]
+  end
+  
+  event :complete do
+    transitions :to => :completed, :from => [:active, :project_hidden, :deferred]
+  end
+  
+  event :activate do
+    transitions :to => :active, :from => [:project_hidden, :completed, :deferred]
+  end
+    
+  event :hide do
+    transitions :to => :project_hidden, :from => [:active, :deferred]
+  end
+  
+  event :unhide do
+    transitions :to => :deferred, :from => [:project_hidden], :guard => Proc.new{|t| !t.show_from.blank? }
+    transitions :to => :active, :from => [:project_hidden]
+  end
+    
+  attr_protected :user
+
+  # Description field can't be empty, and must be < 100 bytes Notes must be <
+  # 60,000 bytes (65,000 actually, but I'm being cautious)
+  validates_presence_of :description
+  validates_length_of :description, :maximum => 100
+  validates_length_of :notes, :maximum => 60000, :allow_nil => true 
+  validates_presence_of :show_from, :if => :deferred?
+  validates_presence_of :context
+  
+  def validate
+    if !show_from.blank? && show_from < user.date
+      errors.add("show_from", "must be a date in the future")
+    end
+  end
+
+  before_validation :update_state_from_project
+   
+  def update_state_from_project
+    if state == 'project_hidden' and !project.hidden?
+      self.state = 'active'
+    elsif state == 'active' and project.hidden?
+      self.state = 'project_hidden'
+    end
+  end
+ 
+  def toggle_completion!
+    saved = false
+    if completed?
+      saved = activate!
+    else
+      saved = complete!
+    end
+    return saved
+  end
+  
+  def show_from
+    self[:show_from]
+  end
+  
+  def show_from=(date)
+    # parse Date objects into the proper timezone
+    date = user.at_midnight(date) if (date.is_a? Date)
+    activate! if deferred? && date.blank?
+    defer! if active? && !date.blank? && date > user.date
+    self[:show_from] = date 
+  end
+
+  alias_method :original_project, :project
+
+  def project
+    original_project.nil? ? Project.null_object : original_project
+  end
+  
+  alias_method :original_set_initial_state, :set_initial_state
+  
+  def set_initial_state
+    if show_from && (show_from > user.date)
+      write_attribute self.class.state_column, 'deferred'
+    else
+      original_set_initial_state
+    end
+  end
+  
+  alias_method :original_run_initial_state_actions, :run_initial_state_actions
+  
+  def run_initial_state_actions
+    # only run the initial state actions if the standard initial state hasn't
+    # been changed
+    if self.class.initial_state.to_sym == current_state
+      original_run_initial_state_actions
+    end
+  end
+
+  def self.feed_options(user)
+    {
+      :title => 'Tracks Actions',
+      :description => "Actions for #{user.display_name}"
+    }
+  end
+  
+  def starred?
+    tags.any? {|tag| tag.name == STARRED_TAG_NAME}
+  end
+  
+  def toggle_star!
+    if starred?
+      _remove_tags STARRED_TAG_NAME
+      tags.reload
+    else
+      _add_tags(STARRED_TAG_NAME)
+      tags.reload
+    end 
+    starred?  
+  end
+
+  def from_recurring_todo?
+    return self.recurring_todo_id != nil
+  end
+  
+  # Rich Todo API
+  
+  def self.from_rich_message(user, default_context_id, description, notes)
+    fields = description.match(/([^>@]*)@?([^>]*)>?(.*)/)
+    description = fields[1].strip
+    context = fields[2].strip
+    project = fields[3].strip
+    
+    context = nil if context == ""
+    project = nil if project == ""
+
+    context_id = default_context_id
+    unless(context.nil?)
+      found_context = user.active_contexts.find_by_namepart(context)
+      found_context = user.contexts.find_by_namepart(context) if found_context.nil?
+      context_id = found_context.id unless found_context.nil?
+    end
+    
+    unless user.contexts.exists? context_id
+      raise(CannotAccessContext, "Cannot access a context that does not belong to this user.")
+    end
+    
+    project_id = nil
+    unless(project.blank?)
+      if(project[0..3].downcase == "new:")
+        found_project = user.projects.build
+        found_project.name = project[4..255+4].strip
+        found_project.save!
+      else
+        found_project = user.active_projects.find_by_namepart(project)
+        found_project = user.projects.find_by_namepart(project) if found_project.nil?
+      end
+      project_id = found_project.id unless found_project.nil?
+    end
+    
+    todo = user.todos.build
+    todo.description = description
+    todo.notes = notes
+    todo.context_id = context_id
+    todo.project_id = project_id unless project_id.nil?
+    return todo
+  end
+end
diff --git a/spec/models/todo_spec.rb b/spec/models/todo_spec.rb
index d2ec9263..cd5922c6 100644
--- a/spec/models/todo_spec.rb
+++ b/spec/models/todo_spec.rb
@@ -136,6 +136,31 @@ describe Todo do
     end
   end
 
+  describe 'when update_state_from_project is called' do
+    it "should unhide when project is active" do
+      project = mock_model(Project, :hidden? => false)
+      todo = Todo.new(:state => 'project_hidden', :project => project)
+      todo.should be_project_hidden
+      todo.save
+      todo.should be_active
+    end
+
+    it "should unhide when project is null" do
+      todo = Todo.new(:state => 'project_hidden', :project => nil)
+      todo.should be_project_hidden
+      todo.save
+      todo.should be_active
+    end
+
+    it "should hide when project is hidden" do
+      project = mock_model(Project, :hidden? => true)
+      todo = Todo.new(:state => 'active', :project => project)
+      todo.should be_active
+      todo.save
+      todo.should be_project_hidden
+    end
+  end
+
   describe 'when toggling completion' do
     it 'toggles to active when completed' do
       todo = create_todo