Unicode problem inserting records - Invalid UNICODE character sequence found (0xfc7269)

My first time using unicode. Based on reading other messages I think I've
got it all setup correctly but still have prob.
Running: psql 7.3.6-RH

$ psql -l
List of databases
Name | Owner | Encoding
-----------+----------+-----------
devdb | devuser | UNICODE
template0 | postgres | SQL_ASCII
template1 | postgres | SQL_ASCII

I've tried two different table structures:

CREATE TABLE airport_code (
airport_name character varying(70),
airport_code character varying(10),
) ;

and the same but with "text" instead of character varying.

For both I get the same results when I try to:

INSERT INTO airport_code ( airport_name, airport_code ) values ( 'Zurich
(Zürich) - Kloten', 'ZRH' ) ;

I get:

psql:airport_codes.sql:1728: ERROR: Invalid UNICODE character sequence
found (0xfc7269)

Obviously I'd like to keep the proper German spelling.

What am I missing?
Gotta figure its me...cause PG is so damm good otherwise.

Tx,
D
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