I had the same problem on Hardy Alpha 4 using en_us.
I noted there's no locale entry on /etc/environment, so I added the LC_ALL 
entry in it and the problem was solved.

[EMAIL PROTECTED]:~$ sudo echo 'LC_ALL="en_US.UTF-8"' >> /etc/environment

I don't know if this is the best way to solve the problem, but it works
for me. :)

-- 
[Hardy] gnome-terminal current locale ANSI_X3.4-1968 not unicode using en-gb
https://bugs.launchpad.net/bugs/185671
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Desktop Bugs, which is a bug contact for gnome-terminal in ubuntu.

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