accentuated characters wrongly displayed (encoding problem) in title bar

I also observe this bug in Ubuntu-8.10 (intrepid).
Very easy to reproduce.
I'm using locale en_US.UTF-8.

Confirmed this is still an issue. Seems to work okay in gnome-terminal though, so guessing it not to be a window manager issue.

I'm still seeing this issue in Ubuntu-9.10 (Karmic Koala) when using xterm. But there is no bug when using gnome-terminal.

see
       http://invisible-island.net/xterm/xterm.log.html#xterm_210

man xterm (resource settings):

       utf8Title (class Utf8Title)
               Applications can set xterm's title by writing a control
               sequence. Normally this control sequence follows the VT220
               convention, which encodes the string in ISO-8859-1 and allows
               for an 8-bit string terminator. If xterm is started in a UTF-8
               locale, it translates the ISO-8859-1 string to UTF-8 to work
               with the X libraries which assume the string is UTF-8.

               However, some users may wish to write a title string encoded in
               UTF-8. Set this resource to "true" to allow UTF-8 encoded
               title strings. That cancels the translation to UTF-8, allowing
               UTF-8 strings to be displayed as is.

               The default is "false."

This bug was fixed in the package xterm - 253-1ubuntu1

---------------
xterm (253-1ubuntu1) lucid; urgency=low

  * Merge from Debian Unstable. (LP: #501150)
    + document in xterm manpage the limited availability of resources color16
      to color255 as noted in patch #188 (LP: #438850)
    Remaining Ubuntu changes:
    - Enabled URL highlighting
  * Add 100_uxterm_utf8_title.patch: Set utf8Titles to true by default
    when using uxterm, so that it displays utf8 directories in titles
    properly. May cause issues with apps that use control sequences for
    updating the xterm titlebar - users should use xterm or set utf8Title
    to false in this case.
    (LP: #320388, #408496)

xterm (253-1) unstable; urgency=low

  * New upstream release
    + parenthesize expression in MoreRows macro, fixing a limit check added in
      patch #251 (closes: #560039)
  * Update debian/copyright.
  * Add dependency on ${misc:Depends} (lintian).
  * Refresh patches 900_debian_xterm.diff and 901_xterm_manpage.diff.

xterm (251-1) unstable; urgency=low

  * New upstream release.
  * Update copy of XTerm FAQ to revision 1.107 (dated 2009/11/11).
  * Upstream introduced a new 'disallowedWindowOps' resource to fine-tune
    which operations are affected by the 'allowWindowOps' setting. After
    discussion with the security team, change the default for the new resource
    to include all operations.

xterm (250-1) unstable; urgency=low

  * New upstream release
    + add check and error-message for fonts that have no printable values in
      the ISO-8859-1 range (closes: #542434)
    + limit minimum cell-width for packed font to maximum-advance
      reported by Xft. Some fonts are wider than that, even in the Latin-1
      range (closes: #550497)
    + correct off-by-one in okPosition fix from patch #249 limit-checks which
      prevented double-click selection on the bottom line of the screen
      (closes: #550368)
    + document in xterm manpage the limited availability of resources color16
      to color255 as noted in patch #188 (LP: #438850)

xterm (249-1) unstable; urgency=low

  * New upstream release.
    + add limit-checks for result of visual_width() function, needed from
      patch #242 and exposed by #244 changes (closes: #548321).
  * Upstream changed the default of AllowWindowOps to false, remove patch
    903_windowops.diff.
  * Use the upstream default for pointerMode; drop patch
    902_pointermode_never.diff.

xterm (248-1) unstable; urgency=low

  * New upstream release
    + correct logic used to improve performance of missing-glyph check, which
      did not handle line-drawing characters (closes: #545220)

xterm (247-1) unstable; urgency=low

  * New upstream release.
  * Bump Standards-Version to 3.8.3.
  * Remove David Martínez Moreno from Uploaders as he hasn't been active on
    this package lately.
  * Kill remaining subversion $Id$ tags from debian packaging files.
  * Use libutempter, remove setgid bit from the xterm binary (closes: #537867).

xterm (246-1) unstable; urgency=low

  * New upstream release
    + interaction between allowSendEvents and the various allowXXXOps
      resources clarified in manpage (closes: #53...