Version:           1.1.1 (using KDE KDE 3.3.2)
Installed from:    Gentoo Packages
Compiler:          gcc 3.3.3 
OS:                Linux

I have found this issue and want to send you a patch.
I hope, it will work correctly and won't break anything.

It is supposed that if user enabled custom recoding 
of ID3v1 tags, then metainfo is stored in non-latin1
encoding. I replaced TStringToQString macro to
detect characters > 0x80, which have zero subset and
recode them as specified in settings

Here is the patch. It's tiny

 
--- amarok-1.1.1.old/amarok/src/metabundle.cpp 2004-10-09 18:52:09.000000000 +0600
+++ amarok-1.1.1/amarok/src/metabundle.cpp 2005-02-06 15:32:14.887009880 +0500
@@ -5,8 +5,10 @@
 #include "collectiondb.h"
 #include "metabundle.h"
 #include "playlistitem.h"
+#include "amarokconfig.h"
 
 #include <qfile.h>
+#include <qtextcodec.h>
 
 #include <kfilemetainfo.h>
 
@@ -16,12 +18,43 @@
 #include <taglib/tag.h>
 #include <taglib/tstring.h>
 
+#include <stdio.h>
 
 /*
  * This class is not very complete, it fits our needs as they stand currently
  * If it doesn't work for you in some way, extend it sensibly :)
  */
 
+#undef TStringToQString
+
+QString TStringToQString( const TagLib::String& s )
+{
+    bool doCustomDecode = false;
+
+    if( AmarokConfig::recodeID3v1Tags() ) {
+        for( TagLib::String::ConstIterator i = s.begin(); i != s.end(); ++i ) {
+            // The following happens when non-latin1 string
+            // is stored in TagLib::String's UTF-16 and is not
+            // converted to Unicode properly. In this case, we should
+            // recode it as specified in Amarok options
+            if( *i > 0x80 && !(0xff00 & *i) )
+                doCustomDecode = true;
+                break;
+        }
+
+    QTextCodec * codec = 0;
+    if( doCustomDecode )
+        codec = QTextCodec::codecForIndex ( AmarokConfig::tagEncoding() );
+        
+    // Maybe codec index is stale after Qt upgrade, or 
+    // AmarokConfig::recodeID3v1Tags() == false. In this case
+    // fall back to TagLib's TStringToQString default behavior
+    if( codec )
+        return codec->toUnicode( s.toCString() );
+    else
+        return QString::fromUtf8(s.toCString(true));
+}
+
 
 //FIXME these aren't i18n'd
 //the point here is to force sharing of these strings returned from prettyBitrate()