Alt-o in xterm

[Russell Shaw <rjshaw netspace net au>]

Hi,
In an xterm, i could press alt-o to get both panels the same.

Now after a few X windows upgrades, alt-o gives an "I" with
two dots above it (0xEF, LATIN SMALL LETTER I WITH DIAERESIS)
UTF-8 locale i guess. On the linux console it gives ESC-o (0x1b6f)

How can i get mc to work in a utf-8 X setup?