A couple of quick comments.
First, I'm not quite sure how you're doing your i18n - your description doesn't have enough detail. I suspect you may have some problems there, in part because I don't see a discussion of ViewHandlers in your posts. See the postings here - i18n posting
- for a basic discussion of how to do i18n in JSF apps.
Second, this may very well be a character encoding issue. There's a lack of control by the developer over the response character encoding in JSF 1.1. This has been improved in JSF 1.2 with the addition of the calculateCharacterEncoding(FacesContext) method to ViewHandler, but the problem remains in JSF 1.1 apps or JSF 1.2 apps that don't use this new functionality. A discussion of the default response character encoding algorithm in JSF 1.2 apps can be found here - View Handler javadoc
In MyFaces/JSP based apps I believe the response encoding is basically just copied from the request encoding. That appears to be the default behavior in Facelets based apps (see FaceletViewHandler).
If everything here is ok - you're localizing correctly and the character encodings of the request and response are both UTF-8 - it's time to check your JVM's character encoding and make sure that it's set to UTF-8 so it can properly read your bundles. You can configure the JVM's character encoding - Google for details.
As part of your debugging process you can use a backing bean to print out Strings from the bundle to your log, to confirm that everything is kosher before the String is written out to the response.
Anyway, those are the places I'd start looking for problems. This post should give you a few things to investigate. Hope that helps.