It dosen't seem to be a problem for me.
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Publicly Displayed Name: Suicide Junkié
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You just have to replace the "é" with "& eacute" whenever you update your profile.
I have to do a similar thing with my sig in order to maintain the angle-brackets around all my links. If I don't replace them all with "& lt" or "& gt" then they are treated as bad HTML tags.