If I use non-latin letters to name a Jabber contact, then in chat windows (and in contact list too after I restart) they are displayed as &#nnn; codes, not as letters I've written. Is this fixable? Can I configure Empathy to use UTF-8 for non-ascii characters in Jabber?
This is probably a bug in Empathy. Consider filing a bug report in their bugtracker (choose component Telepathy — it's the backend library of Empathy).