For advanced users who slightly know what they're doing...

Fix... although I don't know if it's 100% (not using the language charset variable).

If you have some time:

Edit all the files in admin, libs, scripts and root directories in an editor that will allow you to do a search across all files. Eg. Editpad.

Find: htmlspecialchars(
(Example: htmlspecialchars($rss_title))

Add this to the function:
, ENT_COMPAT | ENT_HTML401, "ISO-8859-1")
(Example: htmlspecialchars($rss_title, ENT_COMPAT | ENT_HTML401, "ISO-8859-1"))

Note: I've gone for single quotes 'ISO-8859-1' in the libs > smarty files as it seems common there. Do NOT use single quotes in the other files as this fix wil NOT work.