I would call the font-handling in mirc 7 a very big bug, too. I never thought that mirc would leave the beta status without handling code-pages in existing irc-networks correctly.
In european irc networks we use many channels that uses language specific characters. What mirc now does is receiving channel-names containing fonts like é or ö by the ircd, but it sends out this fonts coded in uft-8.
That could result in many problems and I am not sure if this is a security issue - sending out messages to wrong channels or nicknames.
In my opinion this is a very big mistake. Migrating to utf-8 should be the part of the ircd's, but not of a client. The client has to handle every input in a consistent way.
Think about a webbrowser that can only handle utf-8 and nothing else. Noone would use it!
That's the same what we can answer in our support-channels - do not use mirc 7.1 at the moment, there is no way to join channels that exists since 10yrs.