It'll be a good idea to use GST_TAG_ENCODING for id3v1 tags.
BUT before using this variable try to check: maybe it's allready a valid utf8
(g_utf8_validate(...) GLib function) and only then GST_TAG_ENCODING->utf8 convertion

Maybe "override default id3v2 encoding" can be possible (ONLY for fields wich
claim to be a latin1 field). I know that it is not a standard way, but it is
really necessary.
Some ways of handling such tags:
   (1) suggest to convert all tags to utf8
   (2) don't allow to edit this tags
   (3) allow to read and write this tags.

Some things should be done with iPod and internationalized tags.
I don't know which encoding ipod uses for reading tags, but it can handle
cyrillic names (maybe iTunes does character convertions... I haven't tried to
use libgpod (I don't own an iPod)).
P.S. iRiver use CP1251 for russian tags (it's for shure because I stored all
songs with USB Mass Storage firmaware installed), so an idea about iPod appeared.

Other information:
Version: 0.10.2