One question I offen get when delivering training for Sharepoint is about how the Sharepoint system treats our nordic charachters, such as ÅÄÖ. This is breif explanation about the problem and solution.
There is none of the setups, discs or whatever (even the nordic ones) where diacritics senitivity is turned on by default. This means that the search engine in Sharepoint treats our extra characters as accents instead of real chachters. As a Example Å is treated as accented A and Ä is also treated as a accented A. Which means that sortorders etc is not working correctly, and that search results will not match as expected.
We must tell the system that we wish to be siacritics sensitive. This is not done by GUI (CentralAdmin) but rather out trusted little helper STSADM.
The following command will deliver just that functionality:
Stsadm -o osearchdiacriticsensitive -setstatus TRUE
Also, you must rebuild the index for this to work. Se more information about the command at technet.