As mentioned above, you should not be calling $utfencode on data from 7.x as it is already Unicode.
It is not unless it's displayed.
So then it's the editbox or what? If i type ALT+0159 i can see Ÿ (Latin Captial Letter Y with diaeresis) and when i send it or echo it, it disappears. Or better it becomes a control code.
