Version: (using KDE 4.2.96) Installed from: Ubuntu Packages Under remote:/ is a .desktop file which gives you the possibility to add a new remote folder. It has a dropdown for the encoding of the protocoll (i.e. fish). When adding a new folder, this dropdown always selects the first entry (arabic something) and not my system encoding (utf8). Since I doubt many people use arabic I'd say pick a sane default here. I bet many people don't even know what they should pick there and arabic would potentially make their experience fubar.
I just chekced this using KDE SC 4.8 RC1. The default encoding of my system (UTF-8) is selected by default in the drop down list .