I made some tests.
I found program GeoSetter:
http://www.geosetter.de/en and try set metadatas by them.
I tried set IPTC to this coding by this software: ANSI CP-1250 Windows-1250, ISO 8859-2, UTF-8.
Results in Windows XP Proffesional Czech:
Zoner Media Explorer can show every setting metadatas correctly.
ANSI CP-1250 Windows-1250: Windows Live Photogallery (WLP) is ok, XnViewMP is ok (if Tools/Settings/Metadata/IPTC Encoding/Default IPTC encoding is set to Windows-1250), Picasa is not correct.
ISO 8859-2: WLP metadat 2x first is ok, second is not, XnViewMP is ok (if Tools/Settings/Metadata/IPTC Encoding/Default IPTC encoding is set to ISO 8859-2), Picasa keywords are ok, creator is not correctly.
utf-8: WLP metadat 2x first is ok, XnViewMP is not correct, Picasa is ok.
Results in Linux Kubuntu 10.10:
utf-8: Gwenview is ok, XnViewMP is ok if Tools/Settings/Metadata/IPTC Encoding/Default IPTC encoding is set to locale.
ANSI CP-1250 Windows-1250: XnViewMP is ok if Tools/Settings/Metadata/IPTC Encoding/Default IPTC encoding is set to Windows-1250.
ISO 8859-2: XnViewMP is ok if Tools/Settings/Metadata/IPTC Encoding/Default IPTC encoding is set to ISO 8859-2.
I think the best way is to set to utf-8. Why is not option to read utf-8 in XnViewMP Tools/Settings/Metadata/IPTC Encoding/Default IPTC encoding? It is need to Windows.