A default install of Backtrack 4 with USA set as location and English as language only sets en_US.UTF-8 for the user created during installation. Therefore when one tries to login as root and type with a different keyboard layout than the default for USA in Konsole, certain characters such as "ċäö" will not be displayed.
There are several ways to correct this, but the one that I find easiest is:
1. open ~/.profile
2. change these lines:
LANG=C
LANGUAGE=C

To:
LANG=en_US.UTF-8
LANGUAGE=en_US.UTF-8

3. logout (not only from x)
4. login

Enjoy UTF-8 in Konsole under root!