I'd guess you are using the International keyboard layout. This remembers what key you pressed last and modifies the next keypress accordingly, so as in the example you gave, when you press ` it doesn't immediately generate a ` character but waits to see what you are going to press next.
The problem is that Windows generates two messages when you press a key. First you get a WM_KEYDOWN message that tells you what key was pressed, then if the key pressed is a printing character you get a WM_CHAR that tells you what character was generated. So with the non-international keyboard layout, when you press ` the e you get four messages:
Code:
WM_KEYDOWN - ` key pressed
WM_CHAR - ` character generated
WM_KEYDOWN - e key pressed
WM_CHAR - e character generated
With the International keyboard layout Windows supresses the first WM_CHAR message while it waits to see what you're going to press next, so pressing ` then e produces three messages:
Code:
WM_KEYDOWN - ` key pressed
WM_KEYDOWN - e key pressed
WM_CHAR - è character generated
Apps like, for example, Notepad only process the WM_CHAR messages, so in Notepad with the International keyboard typing ` then e types a single è character. However XBMC does not process WM_CHAR, but instead uses only the WM_KEYDOWN messages. hence XBMC only sees that you typed ` then e and doesn't see the è WM_CHAR message generated by the International keyboard driver.
XBMC was coded this way for good reasons, but as you've found, there are downsides. It also means the alt 0232 key sequence won't generate an è character either.
I must admit that this limitation had never occurred to me before, and in fact yours is the first post I can recall on the subject. We have lots of international users, but they tend to use their regional keyboard layout where the accented keys they need are on the keyboard. I also have to admit that I can't immediately think of an easy solution. Modifying XBMC to process the WM_CHAR messages would be hard, because when the WM_KEYDOWN message is received it's not always obvious whether you can ignore it and wait for a WM_CHAR message, or whether you need to process the WM_KEYDOWN immediately. However it would be possible to add a limited facility for pasting into XBMC edit controls. That would allow you to copy and paste accented characters from e.g. Character Map. I'll have a think about this.
JR