This request was evaluated by Red Hat Product Management for inclusion in the current release of Red Hat Enterprise Linux. Because the affected component is not scheduled to be updated in the current release, Red Hat is unfortunately unable to address this request at this time. Red Hat invites you to ask your support representative to propose this request, if appropriate and relevant, in the next release of Red Hat Enterprise Linux.
Yum has never supported non-ascii package names. Internally, it's mostly ok to use whatever binary strings, but it's the UI that uses unicode that breaks things. In theory, a bunch of to_unicode() calls in output.py (and probably in few other places as well) may fix this, but I'm not sure it's worth it. Maybe upstream, but probably not in EL5.