I use mutt on a Nokia N810 over ssh. The xterm in mine, having selected English as the language in the GUI and not having fiddled with locales manually, uses UTF-8. The locales provided with the machine are named fi_FI, en_GB, etc. but they still seem to use UTF-8 - try grep UTF-8 /usr/share/locale-archive.
Some terminals silently switch to ISO-8859-1 if you print something that isn't valid UTF-8, requiring you to restart them to get back to UTF-8. That, combined with a signature, motd, etc. in ISO-8859-1 can be very confusing. Remember that you can't change the xterm's locale with .profile, that will only change the locale within the shell the xterm runs, not in the xterm's environment itself. BTW, where did you get a maemo binary of mutt? -- Jussi Peltola