utf-8 blues in snow leopard with mutt and vim

Yes, it looks like a true spam page. But it is the only way to describe my problem. I was trying to set up mutt (yes, I am a bit fed up with Mail.app and its inability to be controlled with the keyboard alone in any sensible way). Terminal.app seems to work OK with utf-8. However, the included vim does not. Any time you type an accented char and delete it, the text gets mangled (you know, typical off-by-one cursor position). The solution for vim is incredibly stupid: open up vim and write :set encoding=utf-8 (or do that at any time while in command mode ESC).

For mutt, things are more or less according to the manual, but you must know where to look for. I ended up with the following two lines in my .muttrc:

set &charset ?charset
set charset="utf-8"

but I am uncertain whether the first line of the two is necessary.

YMMV, but that works for me.