Since mid-2005, the eBay API will only accept UTF-8 encoded XML-documents. As encoding all data to UTF-8 is tedious, Services_Ebay will take care of this for you. All you need to do is specify the encoding you want to use in your script when creating a session object.
Using ISO-8859-1 in your script
<?php
require_once 'Services/Ebay.php';
// pass some authentication data
$session = Services_Ebay::getSession($devId, $appId, $certId, 'ISO-8859-1');
$session->setToken($token);
// create new proxy object
$ebay = new Services_Ebay($session);
$item = Services_Ebay::loadModel('Item', null, $session);
$item->Category = 57882;
$item->Title = 'International Item';
$item->Description = 'This description contains Umlaut characters like Ä, ü and ß';
$item->Location = 'At my home';
$item->MinimumBid = '532.0'; $item->VisaMaster = 1;
$item->ShippingType = 1;
$item->CheckoutDetailsSpecified = 1;
$item->Country = 'US';
$item->SetShipToLocations(array('US', 'DE', 'GB'));
$item->addShippingServiceOption(1, 1, 3, 1, array('US'));
$result = $ebay->AddItem($item);
?>
The umlaut characters contained in the description of the item will be automatically converted to UTF-8 when the XML-document is created. Furthermore the result document which is returned by the eBay API will be decoded again to ISO-8859-1 so you do not have to worry about UTF-8 at all.
Of course, it is also possible to supply UTF-8 encoded data to Services_Ebay. All you have to do is change the encoding type, when creating the session object.
Using UTF-8 in your script
<?php
require_once 'Services/Ebay.php';
// pass some authentication data
$session = Services_Ebay::getSession($devId, $appId, $certId, 'UTF-8');
$session->setToken($token);
// create new proxy object
$ebay = new Services_Ebay($session);
$item = Services_Ebay::loadModel('Item', null, $session);
$item->Category = 57882;
$item->Title = 'International Item';
$item->Description = utf8_encode('This description contains Umlaut characters like Ä, ü and ß');
$item->Location = 'At my home';
$item->MinimumBid = '532.0'; $item->VisaMaster = 1;
$item->ShippingType = 1;
$item->CheckoutDetailsSpecified = 1;
$item->Country = 'US';
$item->SetShipToLocations(array('US', 'DE', 'GB'));
$item->addShippingServiceOption(1, 1, 3, 1, array('US'));
$result = $ebay->AddItem($item);
?>
In this example you are using utf8_encode() to encode the data prior to passing it to Services_Ebay. To avoid duplicated encoding, you need to set the encoding to UTF-8.