For advanced localisation here exists Joomla Extension Joom!Fish . Bundled version of Joomla! and Joom!Fish can be found in this bundle . Anyway this Joomla Extension is not solving the localisation problem of RSS feeds. RSS feeds are depending on DOMIT (XML processing module) which nowadays has no support and no accessible web home pages.

Localisation problems can have more deeper roots because PHP framework (up to ver.5 inclusive) does not directly support UNICODE coding. Some remarks related the utf-8 coding and localisation problems are included in Joomla FAQ . 

The problem with standart RSS component in Joomla 1.0.11 is generally recognized (see e.g. SK or CZ Joomla sites). Joomla database have to be in UTF-8 enconding and RSS component shall have transformation function for proper encoding. Recommended for this purpose is AJAX RSS Reader Version 2.2 component .