What version/build of Firefox do you have? Firefox/3.0.6?

Also, check your about:config and filter by IDN, you should see a lot of settings there. Any of them not set to default?

Especially check this one: network.enableIDN

by default it is set to True.

What other Firefox addons do you have that might be parsing URLs before you visit them? Any?

Thanks a lot for the feedback!