I have test firefox3, IE6 and IE7.
In the new issue page, adding ASCII new issue type is correct using all of the three browser.

But when add non-ASCII new issue type, only firefox works fine. IE6 will add mess-up characters to issue types and IE7 will fail to add the new type.

I have resolved this problem by add encodeURIComponent in the promptToRemote function in application.js.
And now both ASCII and non-ASCII new issue type can be added successfully.

Index: application.js
--- application.js Base (BASE)
+++ application.js Locally Modified (Based On LOCAL)
@@ -56,7 +56,7 @@
 function promptToRemote(text, param, url) {
     value = prompt(text + ':');
     if (value) {
-        new Ajax.Request(url + '?' + param + '=' + value, {asynchronous:true, evalScripts:true});
+        new Ajax.Request(url + '?' + param + '=' + encodeURIComponent(value), {asynchronous:true, evalScripts:true});
         return false;
     }
 }