I checked with phpmyadmin, and the data is definitely wrong in the table, so I think it is an import issue. New posts with non-ASCII characters in them work fine, and it looks like the data is being correctly stored in the database as unicode in those cases.
* however *
Changing the generic.php to UTF-8 causes the older posts to display correctly. But I'm a little wary of leaving it like that with incorrect data in the database - it feels a bit like we're sweeping the problem under the carpet
