Join the club.
I think the preliminary answer is that it will be used once Windows implements it, and perhaps not sooner.
mIRC in itself can use most encodings Windows throws at it, but it can't convert between them in the way that X-Chat does. Why Peter Zelezny chose to implement this in X-Chat is not known (or _I_ don't know), but it sure is a nice feature that is perhaps implementable in mIRC as well.
Before you run off and try X-Chat, there's actually an error with the libraries X-Chat uses that causes it to refuse all non-ascii chars under certain conditions, so wait for a more stable version.
