Since Django 1.0, all the values that you get from the form view are unicode objects, not tags, as in Django 0.96 and earlier. To get utf-8 from your values, encode them using utf-8 codec:
request.POST['somefield'].encode('utf-8')
To get the correct query parameters, they must be correctly encoded:
In [3]: urllib.quote('ä')
Out[3]: '%C3%A4'
I think your problem is due to poor coding of the request parameters.
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