I didn't invented the '\r' problem. I've just jumped into it.
I didn't found any other issue with line endings problems in Postgresql. Maybe other '\r' are not harmful. But these in front of host names or host addresses are critical to resolve the ip addresses.
But, for the sake of clarity, the summary is this:
Installing QGIS, in Windows, with libpq, if the pg_services.conf file has '\r\n' line endings, the pg_services fails.
Installing QGIS, in Windows, with libpq, if the pg_services.conf file only has '\n' line endings, the pg_services rocks!
In all likelyhood, if you are using psycopg on windows, you are using a libpq compiled for the client, not the libpq shipped with postgres server for windows.