MT, I use this: "SSH-2.0-OpenSSH_5.0" and I still not agreed that this is a server bug. For fact, this case not relates to server.
Let me say again. There is no possible probs with utf8.
There are the probs with difference in encoding on Win and Linux of file names. Becouse Linux when has iso-8859-2 as encoding for file names then it will open incorrectly the cp1250 encoding. That is the point.
But anyhow SmartFTP can not delete those files while other softwares can (eg. I have tested other sftp tools and has no probs).
1. Try to create some file under Windows (eg. filename ałńóć.txt)
2. Zip (or rar) this file under Windows as eg. file.zip
3. Move the file.zip to the some place under Linux.
4. Unzip the file.zip there and then connect to this unzipped folder by SmartFTP via ftp or sftp.
5. Try to rename or delete this file.
Those are very simple steps and this has nothing in relation with server.
Please look at this image (its a screen from kde under Linux):
And please look at this image (its a screen from SmartFTP connected to sftp):
Same as above second screen will show WinSCP.
Those files under Windows before zipping has had names:
"Elementy usunięte.dbx" and "Elementy wysłane.dbx"
And please member that after copying this zip again into Windows and unzipping it again under Windows will show correct file names (becouse encoding is cp1250). File'snames are not broken in fact.