Problems with intl. chars in RoR 1.2.x

I’ve tried to upgrade my app to RoR 1.2.2, but it broke regular
expressions working with international characters like ‘á’ or ‘ä’ etc.
E.g. /xx: (.+) zz/.match(“xx: aáä zz”)[1] returns NoMethodError in
script/console but it works in plain irb.
Another strange thing: when I enter any string containing those
intl.chars in script/console, it hangs.

Am I doing something wrong? I’ve even tried String#chars method, gem
unicode etc.,but none of them helped.