Ive got an idn domain http://www.hÃ¼nerbein.de or http://www.xn--hnerbein-65a.de/ for compability. Installing WP1.2 Mingus was no problem. When I upgraded to 1.5 the design wasnt working. I contacted the german wordpress support and someone with the same problem got an idea. One had to disable on code snippet in wp-includes/functions-formatting.php.
[code]// $curl = str_replace('--', 'â€“', $curl);[/code]
It seems that everyone with such a domain got the same prob. Maybe one could add this piece of information in installation docs.