Problem with charset. Please help

Greetings all,

I need some help. I am from the Ukraine where we speak Russian and Ukrainian. Problem is: I have never created sites in Russian or Ukrainian, only in English. So, today I uploaded some an almost completed site, you can find it here:
Please, load the page and you will see that instead of normal Cyrillic letters I have some mess.
I assume it has something to do with the character encoding of the page.
Here in the line that I have in the header file… or better yet, here is a part of the header.php which I include for every page:

<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "">
<html xmlns="">
<meta http-equiv="Content-Type" content="text/html; charset=utf-8" />
<title><?php echo $page_title; ?> | &#1059;&#1082;&#1088;&#1072;&#1080;&#1085;&#1089;&#1082;&#1080;&#1077; &#1048;&#1085;&#1085;&#1086;&#1074;&#1072;&#1094;&#1080;&#1086;&#1085;&#1085;&#1099;&#1077; &#1058;&#1077;&#1093;&#1085;&#1086;&#1083;&#1086;&#1075;&#1080;&#1080;</title>
<link href="css/layout.css" rel="stylesheet" type="text/css" media="all" />
<?php if (basename($_SERVER['PHP_SELF']) == 'contact.php'): ?>
<link href="css/forms.css" rel="stylesheet" type="text/css" media="all" />
<?php endif; ?>

Please, help me with the problem. I don’t know what to do. When I test in local environment everything seems to be fine, but not after I have uploaded files to the server, which is in the Ukraine (only assumption here).
Thank you for any advice! I don’t know much about character encoding.
I apologize if my question is silly.

Okay, the problem is solved. I called the support line and they suggested I add .htaccess file with this contents:
AddDefaultCharset utf8
As it turns out, Apache they have installed in run with an encoding other than utf-8?!
Can some one please explain to me what that means?
Anyone can recommend a book for a good read on encoding and charsets?

Very much appreciated Cups. Will have a look at every link you left, hopefully will get a better idea about encoding and charset. Kudo!

Here are some i18n links, I cannot vouch for them all being valid to your question, but you see the same names appearing when it comes down to in-depth knowledge on this subject, to which I am only an observer in the main.

I removed all the Zend Framework links because the ZF support for i18n is so profound it is worth me highlighting it here - head over to the ZF site and there is a whole section about it.!.html

Some of the links are to SP threads, which should reveal some interesting conversations - else searching for i18n and l10n (Internationalisation, Localisation) will find even more.

There is always the classic i18n post of course: