I have the same problem with norwegian characters. Here's what i did:
I made my own myStrToLower($string) function:
function myStrToLower($string)
{
$norwegian = array('Æ' => 'æ', 'Ø' => 'ø', 'Å' => 'å');
$out = strtr(strtolower($string), $norwegian);
return $out;
}
hope you understand how this works
Andreas