Basically, QGIS supports internationalization, but QGIS 1.8.0 Lisboa has some problems with correct encoding of shapefiles. There are some workarounds given here:
How to read Greek fonts (ISO-8859-7) in shapefile attributes within QGIS 1.8.0?
which are a bit Operating-system-dependent.
The matter was fixed in QGIS Master, but currently the bugfixing for the upcoming QGIS 2.0 may lead to a unstable QGIS Master version.
So you might better wait until QGIS 2.0 is published.
EDIT: This only affects shapefiles, other data sources should work correct.