BUG #5405: Consol and utf8

The following bug has been logged online:

Bug reference: 5405
Logged by:
Email address: karoly(at)geoproduct(dot)hu
PostgreSQL version: 8.4.3
Operating system: windows 7
Description: Consol and utf8
Details:

I use powershell console.
PS C:\> chcp 65001
Active codepage: 65001 -> UTF8
PS C:\> psql foo
psql (8.4.3)
foo=# select * from test;
Not enough memory.

foo has UTF8 encoding.
If I use WIN1250 codepage then psql works.
I tried to set encoding of psql but I always got
'Not enough memory' when codepage of console was UTF8.