database locale and system locale

Hi everyone!

I've been reading tons of stuff on locale and postgresql. I am still not
in the clear about some details, though: how do system locale and
database locale work together (or not)?
(In my case, I am speaking of postgresql 8.1 on debian sarge. But
general understanding is what I am looking for.)
If I am running a database cluster with --encoding= UTF8, are there any
troubles to be expected if the system locale remains "C" or somehting
like "de_AT(dot)iso885915(at)euro"?
Any troubles with error messages, dumps, hacking the dump, performance?
Any trouble at all?

Is it enough to have an UTF8 locale installed on the system?
postgres(at)dbneu:~$ locale -a
C
de_AT(dot)utf8(at)euro

Or does it actually have to be the system locale?
postgres(at)dbneu:~$ locale
LC_ALL="de_AT(dot)UTF-8(at)euro"

Do multiple UTF8 system locales have any effect?
postgres(at)dbneu:~$ locale -a
C
de_AT(dot)utf8(at)euro
en_US.utf8

Does anyone know these details? It would ease my mind. :)
Thanx in advance!

Regards
Erwin Brandstetter