to_ascii, or some other form of magic transliteration

I'm working on a problem that I imagine others have had, which basically
boils down to having nice unicode display text that users are going to
want to search against without typing it correctly.... e.g. let a search
for "sma" match "små". It seems like the best way to do this is to find
a magic unicode transliteration mapping function, and then save the
ASCII transliterations for searching against.

I see there's a function to_ascii, which sounds hopeful. However, when I
try to use it, I get back:

ERROR:  encoding conversion from UNICODE to ASCII not supported

What is this function for, if not to convert other encodings to ASCII?
Is there some other way to do what I'm asking for?