Now that I've rewritten the hierarchical query/tree sortkey stuff to use BIT VARYING rather than text, not only should UTF-8 work but you should be able to set your locale and use the proper collation sequence for your language of choice. If you're using PG just remember that you need to do this before you do your post-install INITDB.
Hmmm...this works great for, say, an all-Japanese site but not so well for a mixed-language site. The PG folks have been talking about possibly allowing a little more flexibility in the future.
Anyway ... Henry, if you do work up a set of patches for OpenACS 4 and can test them for both Oracle and PG people would really appreciate it. If you could do so in the next couple of weeks we'd appreciate it even more because that's my rough notion as to when a beta release might be cut. A very rough notion as I've not discussed the documentation schedule with Roberto, yet.