I'm running debian/testing with kernel 2.6.5 and can't type in any
umlauts like in the console.

However, I can open vi in the console and then type them in. After
that I cat display them on the console using cat.

The only hint I have is that printing out the properties using a java
program I see that the encoding is "ASCII", which seems strange to me.

However, looking with hexdump at the file, I can see that the file is
encoded in ISO-8859-1 (latin1).

Can somebody please help me, I'm desperate here...