I am not sure, but I believe that the X servers have accidentely been
compiled w/o the keyboard extensions.

> Why does xterm not show/accept Umlaute?

 What makes you believe it doesnt? /bin/sh, /bin/csh do not display
Umlauts, other shell do it only when compiled with 8BIT. Also, xterm
must use a font with Umlauts (ISO-8859-1 settings in xfontsel).

-- 
Markus Illenseer
NetBSD 1.3.2 CD-ROM "Gateway! Vol. 3" now shipping!  See:  http://core.de/