diff -Burp sed-4.1.5-orig/lib/utils.c sed-4.1.5-follow/lib/utils.c
--- sed-4.1.5-orig/lib/utils.c	2005-06-21 16:09:40.000000000 +0200
+++ sed-4.1.5-follow/lib/utils.c	2006-12-07 19:08:02.000000000 +0100
@@ -35,6 +35,12 @@
 # include <stdlib.h>
 #endif /* HAVE_STDLIB_H */
 
+#include <sys/types.h>
+#include <sys/stat.h>
+#include <unistd.h>
+#include <sys/sendfile.h>
+#include <fcntl.h>
+
 #include "utils.h"
 
 const char *myname;
@@ -315,32 +321,99 @@ do_ck_fclose(fp)
 }
 
 
-/* Panic on failing rename */
-void
-ck_rename (from, to, unlink_if_fail)
-  const char *from, *to;
-  const char *unlink_if_fail;
+#include <libgen.h>
+
+/* Follow symlink and panic if something fails.  Returned value is
+   ultimate symlink target, stored in malloc'd buffer.*/
+const char*
+ck_follow_symlink(const char * fname)
 {
-  int rd = rename (from, to);
-  if (rd != -1)
-    return;
+  static struct stat statbuf;
+  int err;
+  char * dir;
+
+  static size_t bufsize = 1024;
+  char * buf = malloc (bufsize);
+  char * buf2 = alloca (bufsize);
+
+  if (strlen (fname) >= bufsize)
+    panic("ck_follow_symlink: file name too long");
+  strcpy (buf, fname);
 
-  if (unlink_if_fail)
+  while (1)
     {
-      int save_errno = errno;
-      errno = 0;
-      unlink (unlink_if_fail);
+      err = lstat (buf, &statbuf);
+
+      if (err != 0)
+	panic("ck_follow_symlink: couldn't lstat %s: %s", buf, strerror(errno));
 
-      /* Failure to remove the temporary file is more severe, so trigger it first.  */
-      if (errno != 0)
-        panic (_("cannot remove %s: %s"), unlink_if_fail, strerror (errno));
+      if ((statbuf.st_mode & S_IFLNK) == S_IFLNK)
+	{
+	  err = readlink (buf, buf2, bufsize);
+
+	  if (err < 0)
+	    panic("ck_follow_symlink: readlink failed on %s: %s", buf, strerror(errno));
+	  else if (err == bufsize)
+	    panic("ck_follow_symlink: pointee name too long");
+	  else
+	    buf2 [err] = '\0';
+
+	  /* need to handle relative paths with care */
+	      dir = dirname (buf);    // dir part of orig path
+	      int len = strlen (dir); // orig path len
+	  if (buf2[0] != '/' && len != 1 && dir[0] != '.')
+	    {
+	      buf[len] = '/';
+	      strncpy (buf+len+1, buf2, bufsize - len - 1);
+	      if (buf[bufsize-1] != 0)
+		panic("ck_follow_symlink: pointee name too long");
+	    }
+	  else
+	    {
+	      strcpy (buf, buf2);
+	    }
+	}
+      else
+	break;
+    }
+
+  return buf;
+}
 
+/* Panic on failing unlink */
+void
+ck_unlink (name)
+  const char *name;
+{
+  if (unlink (name) == -1)
+    panic (_("cannot remove %s: %s"), name, strerror (errno));
+}
+
+/* Attempt to unlink denoted file if operation rd failed. */
+static int
+_unlink_if_fail (rd, unlink_if_fail)
+  int rd;
+  const char *unlink_if_fail;
+{
+  if (rd == -1 && unlink_if_fail)
+    {
+      int save_errno = errno;
+      ck_unlink (unlink_if_fail);
       errno = save_errno;
     }
 
-  panic (_("cannot rename %s: %s"), from, strerror (errno));
+  return rd != -1;
 }
 
+/* Panic on failing rename */
+void
+ck_rename (from, to, unlink_if_fail)
+  const char *from, *to;
+  const char *unlink_if_fail;
+{
+  if (!_unlink_if_fail (rename (from, to), unlink_if_fail))
+  panic (_("cannot rename %s: %s"), from, strerror (errno));
+}
 
 
 
diff -Burp sed-4.1.5-orig/lib/utils.h sed-4.1.5-follow/lib/utils.h
--- sed-4.1.5-orig/lib/utils.h	2005-06-21 16:09:40.000000000 +0200
+++ sed-4.1.5-follow/lib/utils.h	2006-12-07 19:00:11.000000000 +0100
@@ -29,6 +29,7 @@ void ck_fflush P_((FILE *stream));
 void ck_fclose P_((FILE *stream));
 size_t ck_getline P_((char **text, size_t *buflen, FILE *stream));
 FILE * ck_mkstemp P_((char **p_filename, char *tmpdir, char *base));
+const char* ck_follow_symlink P_((const char * fname));
 void ck_rename P_((const char *from, const char *to, const char *unlink_if_fail));
 
 VOID *ck_malloc P_((size_t size));
--- sed-4.1.5-orig/sed/execute.c	2006-12-08 16:33:20.000000000 +0100
+++ sed-4.1.5-follow/sed/execute.c	2006-12-07 18:53:11.000000000 +0100
@@ -712,16 +712,18 @@
 
   if (in_place_extension && output_file.fp != NULL)
     {
+      char * target_name = ck_strdup (ck_follow_symlink (input->in_file_name));
       ck_fclose (output_file.fp);
       if (strcmp(in_place_extension, "*") != 0)
         {
+          char *backup_file_name = get_backup_file_name(target_name);
+	  ck_rename (target_name, backup_file_name, input->out_file_name);
-          char *backup_file_name = get_backup_file_name(input->in_file_name);
-	  ck_rename (input->in_file_name, backup_file_name, input->out_file_name);
           free (backup_file_name);
 	}
 
+      ck_rename (input->out_file_name, target_name, input->out_file_name);
-      ck_rename (input->out_file_name, input->in_file_name, input->out_file_name);
       free (input->out_file_name);
+      free (target_name);
     }
 
   input->fp = NULL;