using LATIN1 ?

I've compiled postgresql with multi-byte support, and created a
database with:

create database l1 with encoding 'LATIN1';

It was created succefull.

I started "psql l1" and issued this query "select upper('á')" and get
back "á" expected "Á".

I created a table with "create table test(f varchar(50));"

I inserted this values "insert into test(f) values('áé');"

It was ok now "select upper(f) from test;" gave me back "áé" ->
expected "ÁÉ";

what's the problem ?