please, make this test
1. create a file on your computer with the ° character in the name
2. drag&drop the file in HFS
3. see if the name is shown correctly in the "virtual file system" box, and report it here
After the 3rd step the file is shown correctly, and also downloadable.
But when I wanted to UPLOAD this file from an account, sometimes I got this:

and sometimes I run into cca. 2 minutes long "upload" period, and then an error page ("Internet Explorer cannot display the webpage...").
And the log is:
5:40:13 gabib@192.168.2.1:1212 Requested GET /HFS_gabi/~upload
5:40:13 gabib@192.168.2.1:1212 Served 1.30 KB
5:40:22 gabib@192.168.2.1:1211 Uploading test°test.txt
5:40:22 gabib@192.168.2.1:1211 Fully uploaded - 1.39 KB @ 88 KB/s
5:40:22 gabib@192.168.2.1:1211 Requested POST /HFS_gabi/
5:40:22 gabib@192.168.2.1:1211 Served 1009 B
Another log with progress bar:
5:41:42 gabib@192.168.2.1:1217 Requested GET /HFS_gabi/
5:41:42 gabib@192.168.2.1:1217 Served 1.27 KB
5:41:48 gabib@192.168.2.1:1218 Requested GET /HFS_gabi/~upload
5:41:48 gabib@192.168.2.1:1218 Served 1.30 KB
5:41:52 gabib@192.168.2.1:1218 Requested GET /HFS_gabi/~upload+progress
5:41:52 gabib@192.168.2.1:1218 Served 149 B
5:41:53 gabib@192.168.2.1:1219 Requested GET /HFS_gabi/~upload-no-progress
5:41:53 gabib@192.168.2.1:1219 Served 1.30 KB
5:42:02 gabib@192.168.2.1:1217 Uploading test°test.txt
and after 2 minutes the error page ("Internet Explorer cannot display the webpage...").