Version:           1.2.2 (using 3.5.8, Kubuntu (gutsy) 4:3.5.8-0ubuntu3.3)
Compiler:          Target: i486-linux-gnu
OS:                Linux (i686) release 2.6.20-16-generic

On creation of a new key-pair I've entered a passphrase of "aaaaß" and repeated it. The dialog shows 6 circles for I only typed 5 letters each 'a' got one and two for the greek beta 'ß' which is also used as the szlig in HTML.

The generated key is unuseable, because every other password-dialog will not accept and unlock on entry of "aaaaß" (they display only 5 circles). This also applies to typing the passphrase into a console at the gpg-prompt.

To still use those characters for now, I created the key with a dummy passphrase "hello" and changed it in the console with gpg directly. Thereafter kgpg will accept 'ß' in its dialogs.

Perhaps I should mention, this is a German keyboard and it has a direct key to type 'ß'. It works quite well. In addition I have the "nodeadkey"-option, so I can type ~ and ^ in a single stroke. The key generation passphrase dialog is the only place, that failed so far.