Set Gnome terminal’s default charset to utf8

The color palettes are all hard-coded so adding custom themes to gnome-terminal built-in Prefs Menu is not possible unless you are willing to patch the source code and recompile the application.

One way of setting a custom color themes for your profile is via scripts. Have a look at how solarize does it:

gnome-terminal-colors-solarized

Note, though, that gconf is EOL and future releases of gnome-terminal will use gsettings backend.

Your setting for LANG must match the terminal's. More precisely, your setting for LC_CTYPE (the character encoding) must match the terminal's encoding, the other locale settings don't need to match. And the terminal's encoding is usually specified by an option of the terminal emulator and not by a locale variable. The LC_CTYPE combines two indications: it tells applications what encoding to use on the terminal (both for input and output), and it tells applications what encoding to use with files. In cases 2 and 3, you've told ls to display output in an encoding that's different from the terminal's, so the output is garbled.

If you work with both UTF-8 and latin-1 encodings at different times, configure your terminal to use UTF-8. This should cause it to set LC_CTYPE to a value indicating UTF-8; don't override this setting. (If the terminal emulator doesn't set LC_CTYPE, do override it in your shell startup file or for your whole session.) To work with latin-1 data in an UTF-8 terminal, use luit (included in the X utility suite).

LC_CTYPE=en_US.iso88591 luit

(You can use any other locale with the same encoding, e.g. LC_CTYPE=es_ES.iso88591 luit.)