[veidr]

As another anecdotal data point, I visit non-Latin URLs almost every day working in Tokyo. For example,

http://www.amazon.co.jp/自転車-カテゴリー別/b/ref=sa_menu_bic9?node=1...

Although I can't really figure out why they bother localizing that one component of their URL, when they have all that gibberish-in-any-language crap at the end.

That is just an internationalized resource identifier (IRI), which is a different thing--and more widely supported--than an internationalized domain name (IDN). I too seldom use those in practice.

Because the part of the URL after the actual host/domain doesn't involve the DNS system, progress was more quickly made there.

More info: http://www.w3.org/International/articles/idn-and-iri/