[tintin]

I think this is very bad, security wise. Take this URL for example: www.paypaᥣ.com Ofcourse it depends on the font used and the characters chosen, but you can trick people into opening a site they trust.

(for those who don't get it: the L of paypal is not an L)

[taejo]

This is a well-known issue, and Firefox deals with it by showing (in this example) http://xn--n3h.net/ in the address bar.

[tutuca]

chrome is doing the same here (chrome 18/linux)