ilike locale problems on cygwin

I'm running Postgres 7.3.1 configured with --with-mb=UNICODE --with-locale on
both Linux (Slackware 8.1) and Windows 2000 (cygwin 1.3.18 (0.69/3/2))

The data stored will be english, swedish, danish, norwegian, chinese and
german so I want to use UNICODE encoding to be able to support that. I also
need to be able to ignore cases (when the characters stored have such a thing
as cases) so this is why i need locale support so that I can set one database
that has swedish data to sv_SE, zh_CN for the one with chinese data etc.

On Linux everything works fine, I am able to insert and retrieve data without
problems. On Cygwin, however,  when I'm using ilike(), lower() and upper() I
don't get characters other than A-Z converted.

databases are initialized as follows:

initdb -E UNICODE --lc-ctype=sv_SE -D /usr/local/pgsql/data

and created as follows:

> psql -l
        List of databases
   Name    |  Owner   | Encoding
-----------+----------+----------
 rpn       | postgres | UNICODE
 template0 | postgres | UNICODE
 template1 | postgres | UNICODE

Using a Java swing client (dbVisualizer) and the JDBC driver (pg73jdbc3.jar)
to connect to the database:

SHOW CLIENT_ENCODING
returns the value "UNICODE" (my quotes)

create table test(
 name varchar(30)
);

insert into test values ('Övik');

select * from test where name ilike '%öv%';
gives me the expected result "Övik" (my quotes)

So on Linux everything works fine: all conversions works as expected, but on
Cygwin

select * from test where name ilike '%öv%';
gives me no matches but

select * from test where name ilike '%Öv%';
gives me the expected result "Övik" (my quotes)

I've tried to initialize the db using both --lc-ctype=sv_SE and --lc-ctype=sv
but neither of them gives me the correct result it still seems to be using
standard C locale (my guess) for character conversion.

The Cygwin environment is installed without any modifications. I just followed
the instructions for setting up Postgres.
/usr/share/locale has a subdir for sv and /usr/share/locale/locale.alias has
the following value for swedish: sv_SE.ISO-8859-1

Any suggestions for how to make Postgres on Cygwin behave the same way as on
linux with regards to locale settings and ilike would be most welcome.

Best regards,
Per