Comment 3 for bug 408496

Hello, the Ubuntu system generally is utf8 based. That 'Zenék' directory was created by the installer (when I created my user account), and it really means Music. So changing the setting I suggest you to change would only mean that XTerm wouldn't be an exception anymore. I encounter the current behaviour as an inconsistency (well, any window manager not using utf8 as the default encoding is also an inconsistency)
again:
imi@most:~$ echo $LANG
hu_HU.UTF-8