CentOS (RHEL) apache encoding

Hi folks,
somewhat of a new boy to this webserver lark but..

In a new installation of CentOS (httpd-2.0.52-28.ent.centos4), the
default encoding in httpd.conf is
AddDefaultCharset UTF-8

We are a small UK based hosting company, customers are having problems
with odd character being displayed on their websites whenever they use
the UK pound sterling sign £ and a few others.

A colleage changed the httpd.conf line to
AddDefaultCharset BS_4730

This solved the immediate problem but caused some W3C validation
problems and broke an XMLHttpRequest() issue in explorer with some
sites.

I changed the value to
AddDefaultCharset ISO-8859-1
This solved the UK pound sign problem and the W3C validation problem
(unless the customer's web page specifically stated <?xml
version="1.0" encoding="UTF-8"?> Then it broke validation AND odd
character issues)

As you can guess, we are fumbling around in the dark here.

If it helps..... pstree on the local vc looks fine, but from a windows
machine using an ssh client the line drawing characters are a mess. I
have tried pstree -U and pstree -G, they just cause a different mess.

I would love to think that the problems are related and one simple
locale option - or similar - will solve all of these , but I'm out of
ideas.

Any help would be greatly appreciated.
Cheers
Andy