I too have had an issue with input/output of German characters in my terminal and scripts - my solution has been to use Unicode::UTF8simple which works for my needs. (slurping in German text files, processing the text a bit and then writing the output to HTML or straight through to sendmail)

I'm not sure that I understand your issue completely, but with the following code I can enter a word with German chars - äöüß - and the output is exactly what I expect. I hope this helps.

use strict;
if (@ARGV) {
  use Unicode::UTF8simple;
  my $uref = new Unicode::UTF8simple;
  my $utf8string=$uref->fromUTF8("iso-8859-1",@ARGV);
  my $string=$uref->toUTF8("iso-8859-1",$utf8string);
  print "I give you: $string\n";
}
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