Any channels or servers that use only code page support and not UTF8 support will have issues until they start supporting UTF8. You will have to stick to 6.35 until support for UTF8 is added to those channels and/or servers.
By the way, IRC protocol standard document clearly states what there is no character set defined, this particularly means payload text is raw octets (8 bits, sic!)
and conversion to characters
is up to clients. So, you cannot accuse any server in not supporting UTF-8 (or any other code pages).
The main reason to upgrade to mIRC 7.1 is for unicode support and if you aren't going to use it, there's not much reason to upgrade anyhow.
For me, it was kind of race condition on losing focus under Windows 7 with Aero enabled. (mIRC 6.35 had more time on CPU than IE 8, heh)
Sorry to interrupt UTF-8 praises, but theoretical maximum of 491 bytes (:n!u@h PRIVMSG #c :<491 bytes of payload><CR><LF>) reduces by 2 times (or 3 times for eastern ircers) that's why people speaking unsupported languages do not hurry to make their IRC UTF-8 compliant.