it does not happen on openSUSE 10.3 "out-of-the-box"
because this has a CUPS 1.2 version installed which
still accepts non-UTF-8.
To reproduce it on openSUSE 10.3, you must update
to CUPS 1.3, see my above comment where you can
download appropriate RPMs.
Additionally you must set a non-UTF-8 locale like
and then run e.g. hp-toolbox from the termial window
where you have set the non-UTF-8 locale.