Just for note: this is not just about diacritics. Many would expect 'ø' to be matched by 'o' (and Danish people would also expect 'oe' to match). To fully resolve this bug we need a full featured transliteration framework. There are options out there, but it's not trivial to add in our current setup. It's my hope that we can tackle this for Ubuntu 12.04.
Just for note: this is not just about diacritics. Many would expect 'ø' to be matched by 'o' (and Danish people would also expect 'oe' to match). To fully resolve this bug we need a full featured transliteration framework. There are options out there, but it's not trivial to add in our current setup. It's my hope that we can tackle this for Ubuntu 12.04.