iso-8859-1 characters in psql

Hello,

I want to have iso-8859-1 characters to be displayed in psql.

I am using Linux with german umlauts enabled, meaning my console is set to
iso8859-1 and readline accepts ,,, etc. My Database encoding is UNICODE.
The inserting of umlauts works, and there are umlauts in the database
tables.

When i use client_encoding=UNICODE, "select * from kunden where ...foo...."
returns "tst" instead of "tst", so it seems like a dump of the internal
utf-8 encoding. It is OK, because of course my linux console is using
iso8859-1 and not unicode, like stated in the variable, but okay...

When i use client_encoding=iso-8859-1, "select * from kunden where
...foo...." returns "tst" instead of "tst", so it seems hat the characters
get dropped instead of beeing converted.

Is it possible to have psql behaving correctly?
Or would it normally behave correctly, and i have another problem with my
system, like some locale configuration error?

cheers and thanx,
Mig-O