I don't see a UTF-8 language pack (yes, I'm quite aware of what utf-8 is) listed on the official phpbb site:
http://www.phpbb.com/downloads.php#lang
If you have some ideas on how to get this to work, I'm all ears.
There's also some issues with the outgoing Emails... I'll have to futz around with that one. They shouldn't be coming from memblers, that's for sure.