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The character is so international that it is commonly used in English... it's æ
I assumed that being part of English it would have displayed without redirecting to Punycode. Is this a bug or something by design?
The redirection happens in both IE 7 and Firefox 1.5.0.9
If we are we talking about a .com or .net domain, then the current Firefox behavior will always display as punycode. See:
[mozilla.org...]
In order for us to display IDNs in a particular TLD, that registry concerned must have and keep a published policy stating which characters are permitted. If the set of characters contains pairs of homographic characters, the policy must specify a method to prevent two homographic domains being registered to different entities.
VeriSign haven't defined a policy in this regard, or if they have they haven't registered it with the Firefox team. So the entire process depends on the registry "emailing Gerv" and if Gerv is satisfied, waiting for the changes to roll out in subsequent releases. Whether the Firefox team has attempted to solicit a policy out of what is the most important domain registry is another question. :)
For IE7, the situation is more complicated, but is well-summarized here:
[blogs.msdn.com...]
In short, if the characters fall outside the user's usual browser language settings, then the domain will revert to the ASCII domain.