The new gnome-terminal is unable to present international fonts which are represented by empty spaces. I personally tried with iso-...-7 (modern greek) but other users in the forums seem to have the same problem with -2 (slavic). Other gnome2 apps (like gedit) work perfectly with these fonts. Notably, I had very similar problems with xchat-1.8.10 (built against gtk-1.2.10 instead) until I disabled the "use font set" option. Any clues / suggestions?
this is a known bug in the upsteram Gnome version, gnome-terminal uses zvt which isn't capable of rendering anything else than ascii.. This will be fixed in gnome 2.2, or in the alternative zvt-i18n branches. unfortunately its nothing we can fi x on our side. :/
*** Bug 11056 has been marked as a duplicate of this bug. ***