If I were to build a GNU system, I would make UTF-8 the default, but then I would also make all sure all applications use that out of the box (actually, is emacs ready for that? I am unsure). For what it is worth, GNU will use UTF-8 by default. As for Emacs, I don't think so, there is a branch for UTF-8 support that I think will be merged into the trunk when 22.1 has been released.