Basically, QGIS supports internationalization, but QGIS 1.8.0 Lisboa has some problems with correct encoding of shapefiles. There are some workarounds given here:

http://gis.stackexchange.com/questions/44009/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.