Maybe you don't need my opinion on this, but I think it's time drop old extended ASCII encodings everywhere and stick to UTF-8. Unicode standard has been available since 1991. Every major operating system and many editors support it. If your editor doesn't produce UTF-8 encoded output, pick another editor. Encoding conversion only makes code more complex (there are dozens of non-Unicode encodings) and doesn't add much value in 2009.

Major Linux distributions, Mac OS X come with UTF-8 terminals by default, and Windows has it as an option, AFAIK.