OK I figured out whats wrong, well not exactly what causes it...

when I set: $pod_usequery=0;

I can have searches restricted to the categories, but it breaks categories like: World::Espan~ol returning an error like this:

POD encountered the following error while trying to run:
404 Not Found
Attempted retrieval URL: http://dmoz.org/World/Español/

This also happens on the demo site!!!

When I set that VAR to "1"

links like the World::Espan~ol work but then the search is no longer restricted to that category and it searches the whole directory....

Any idea on how to fix this? or even where to start looking? It seems to me that some foreign characters get truncatet somewhere....

Thanx

PS: got the latest bug fix release