Which terminal do you use?
I have tried to reproduce this behaviour with uk_UA.utf8 but I didn't saw any problem in console and xterm.
I also use Terminal (for XFCE4) and it has problems with non-English locales.
xterm has problems with non-UTF8-locales like uk_UA.KOI8-U.

echo -ne "\e%G" switches console to UTF8 mode.
Each file in profile.d gets executed each time you logs in to console.
locale.sh is not executed when using su, but it executes when using su -, so maybe the problem is because of sending two echo -ne "\e%G" to one physical console screen. But then again I must say that there is no such problem in plain text console and xterm. I doubt that there is any substantional differences between any UTF8 locales. Have you tried to reproduce this behaviour on another terminals?

I have this problem in console mode when doing "su -" or with mrxvt, no problem when loging directly in root.

Could you post your locale.sh, profile, .bashrc here?
Or send it to Roman.Kyrylych@gmail.com, I'll take a look, as I was involved in polishing localization stuff in rc.sysinit

sorry, but i have no more problem in console mode, i don't know why, neither with xterm, only with mrxvt (maybe because it doesn't support utf-8...)
thanks :)

You are welcome. :)
Anyone has the exactly the same problem as described by Morgan?
If not, then this bug can be closed.

Morgan, please see also this:
http://bugs.archlinux.org/task/3996#comment8276

thanks but same problem this this new rc.sysinit

Then try to replace
echo 'echo -ne "\e%G"' >>/etc/profile.d/locale.sh
with
echo 'if [ "$TERM" = "linux" ]; then echo -ne "\e%G"; fi' >>/etc/profile.d/locale.sh
in this new rc.sysinit
and check if UTF8 is working in xterm, rxvt, gnome,terminal, Konsole, other terminals (the more you test - the better).

And why do you use mrxvt with UTF8 locale, if it does not support UTF8?
If there is no problem with new rc.sysinit (from bug #3996 or from CVS) in xterm, aterm, rxvt, gnome-terminal, Konsole, then the problem is not in %G but in mrxvt. If the problem exists xterm and others terminal, then try the fix above.

I have same problem here with rxvt-unicode. This should really be fixed in rc.sysinit (because that echoed control sequece is only for linux console, not for terminal emulators like rxvt, xterm, etc.)

To Mikos:
does the latest rc.sysinit from testing/initscripts still causes problem?

To Mikos and Comete:
does this: http://bugs.archlinux.org/task/3969#comment8295 fixes your problems?
I have tried to use Terminal with uk_UA.utf8 locale and without %G, and UTF8 is not working for me.

uk_UA.utf8 locale with %G is working in xterm and Terminal, at least for me.

Hi Roman !

echo 'if [ "$TERM" = "linux" ]; then echo -ne "\e%G"; fi' >>/etc/profile.d/locale.sh

that works ! thanks ! :)

I checked uk_UA.utf8 again and it works too (with no %G), so my previous post about uk_UA.utf8 not working is wrong.
Yepp, another localization bug fixed. :)

Thanks for the investigation, Roman.

Added the conditional to rc.sysinit for -23