Hi Lordcoffee,
I don't have an easy solution for this right now. Unfortunately it seems like IE won't do the proper translation for the 'ä' character. To work around it I would have to find some way to do url encoding, but I can't recreate this problem on my server so I can't even test it. Under UTF-8 I have more severe path problems, while under native encoding it just strips the character out.
The easiest way to fix this would be to create a metadata layer above the directories so that you could name a directory one thing (like "TheoTglichundAnders", which would be completely path safe) and have a display string that is separate (ie 'Theo Täglich und Anders') but is used for display purposes.
Carl requested something like this not too long ago here:
http://www.s9y.org/forums/viewtopic.php ... +directory
Judebert put it on the SourceForge.net feature tracker, so it is recorded somewhere.
This is a feature I would love to work on, but I am headed back to school in less than a month and I'm not sure I will have much time. I'll mull it around and see if I can come up with a simple way of doing it, though. (Really it isn't much. The easiest way to do it would be with a table that stored actual directory name, title, description, and an id key. I'd just like to see it flexible enough to allow an image to be associated with it, too. And I'm not sure how Garvin would feel about adding another table to the core schema.)