Found this info.....
International Character Support (Gotcha/Lack of Documentation)
Lots of questions about this, Lee Thomason from Macromedia cleared up some of the issues with the info below:
In the authoring tool: In the MX authoring tool, you can enter any characters in your current code page. For English (and other European) systems, this is Latin-1 or MacRoman. The OS doesn't support the entry of Chinese characters (for example) into entry fields because the code page doesn't support it.
For actionscript, you can work around this by #include of an actionscript file. The .as file should be UTF8 and contain the first line:
so that MX will know its a UTF-8 text file. You can put any characters in any language in that file that you wish, and should be correctly displayed by the Flash Player.
In the Flash player: The Flash player is completely Unicode. It can display in any language available on your OS, and take input in any language supported by your OS. This varies by OS: NT, 2K, and XP will allow an English system to run a Japanese IME, which will put Japanese characters into dynamic text fields, mixed with any other language you have input support for. Output is supported in any language you have font packs for. (Although it is limited to left to right character sets.) The 9x kernels are somewhat more limited, but still support multi language output in almost all cases.
When loading data (via LoadVariables or XML) the Flash 6 player will assume UTF-8 encoding unless system.useCodepage = true, in which case it will load in the current codepage, Latin-1 in the case above. This does mean that if you load Latin-1 data, that contains high ASCII, into a Flash Player 6 without useCodepage set, it will be garbage! The encoding is not set correctly. You need to use UTF-8 data or set useCodepage.