when picins package is used as e.g. \usepackage{picins} latex says: (/usr/share/texmf/tex/latex/misc/picins.sty Option `picins' Version 3.0 Sep. 1992, TH Darmstadt/HRZ ! Text line contains an invalid character. l.579 ^^Z cure: very simple, remove last non-ASCII character from /usr/share/texmf/tex/latex/misc/picins.sty this problem is probably not specific to Gentoo but more general
it seems to be fixed in tetex-texmf-2.0.2.tar.gz
Added a patch for tetex-1.0.7. Thanks for reporting the bug.