UTF-8 and M-x shell?

[Daniel Pfeiffer <occitan@esperanto.org>]

Hi,

I'm migrating my Gnu/Linux to LANG=de_DE.UTF-8 and finding that I need to
recode my old Latin-9 filenames.

But now Gnu Emacs (2-3 weeks old CVS) M-x shell gets problems.  First off, the
buffer still comes up in Latin-1.  That can apparently be fixed with
(set-language-environment "utf-8"), but only interactively, not in .emacs.el! 
But it doesn't help:

- M-! umlaut-emitting-command displays old (1-byte) umlauts as octal and utf-8
correctly

- but with the same commands in the shell buffer, with mode-line u:, it still
displays everything as one-byte.

What must I do for M-x shell to respect $LANG, like an xterm?

(Btw. before I had LANG=de_DE@euro, which is Latin-9, but Emacs wrongly
defaulted to Latin-1 -- which luckily is quite similar.)

best regards
Daniel

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