win32, console UI: unexpected UTF-8 there
In Windows all console input/output is handled under so-called OEM-encoding for the certain language (for many languages, but not for all, this is the same as so-called ANSI-encoding used for GUI. They both frequently informally are called DOS-charset and Windows-charset). If need some overview, you can try looking at http://natspec.sf.net or http://rusxmms.sf.net
So what is wrong with VLC ? simple: it sends raw UTF into console, while it should convert text to (on my PC) russian DOS encoding "cp866" before. I also think, while did not tested, that VLC also expects UTF8 in user's input from console, while it would go in that very "cp866" encoding.
I think thse of you, using western charsets would never notice this, since Latin1 7bit is the same in any NLS ASCII and UTF8. However users with characters above 7bit i think sould notice the difference.
Screenshot attached.