The following bug has been logged online:

Bug reference: 1792
Logged by: Josef Springer
Email address: Josef.Springer (AT) joops (DOT) com
PostgreSQL version: 8.0.1
Operating system: Win2k
Description: Encoding vovels
Details:

I work an application using PostgreSQL via the ODBC driver. OS: Win2k german
codepage.
If i write into a record strings with vovels. Reading this record gives the
vovels corrupted.
I have tried:
CREATE DATABASE ENODING Default | WIN1250 |, LATIN1
SET client_encoding TO Default | WIN1250 | LATIN1
Nothing works. I PgAdminIII the data are displayed correcly allways.

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