using initcap() for the French charater

Hello,

I am having a problem of using initcap() for the French charater.

. create table test (id varchar(3));
. insert into test values('É');
. select initcap(id) from test;

*Got ERROR:*  invalid multibyte character for locale
HINT:  The server's LC_CTYPE locale is probably incompatible with the 
database encoding.


By the way, both my client and server encoding are  "UNICODE".

Ying