Unicode characters with macrons over them are displayed on the SB1 as the normal latin character but without the macron. I'm not sure if this is a limitation of the SB1 or not. Examples of such letters:

Latin Small Letter O with Macron (unicode 014D) is displayed as just o rather than ō

Latin Capital Letter U with Macron (unicode 016A) is displayed as just U rather than Ū

Media type is FLAC with UTF-8 character encoding. All characters display properly in SqueezeCenter.

If it helps, below is an Excerpt of hexdump -C

00000210  6e 63 65 20 6c 69 62 46  4c 41 43 20 31 2e 32 2e  |nce libFLAC 1.2.|
00000220  31 20 32 30 30 37 30 39  31 37 11 00 00 00 27 00  |1 20070917....'.|
00000230  00 00 41 52 54 49 53 54  3d 44 65 6e 6e 69 73 20  |..ARTIST=Dennis |
00000240  4b 61 6d 61 68 61 6b 69  20 26 20 44 61 76 69 64  |Kamahaki & David|
00000250  20 4b 61 6d 61 6b 61 68  69 09 00 00 00 43 4f 4d  | Kamakahi....COM|
00000260  50 4f 53 45 52 3d 3b 00  00 00 41 4c 42 55 4d 3d  |POSER=;...ALBUM=|
00000270  48 61 77 61 69 69 61 6e  20 53 6c 61 63 6b 20 4b  |Hawaiian Slack K|
00000280  65 79 20 47 75 69 74 61  72 20 4d 61 73 74 65 72  |ey Guitar Master|
00000290  73 20 43 6f 6c 6c 65 63  74 69 6f 6e 20 56 6f 6c  |s Collection Vol|
000002a0  75 6d 65 20 32 0c 00 00  00 44 49 53 43 4e 55 4d  |ume 2....DISCNUM|
000002b0  42 45 52 3d 31 0b 00 00  00 44 49 53 43 54 4f 54  |BER=1....DISCTOT|
000002c0  41 4c 3d 31 0b 00 00 00  47 45 4e 52 45 3d 57 6f  |AL=1....GENRE=Wo|
000002d0  72 6c 64 10 00 00 00 54  49 54 4c 45 3d ca bb c5  |rld....TITLE=...|
000002e0  aa 6c 69 6c 69 20 45 0d  00 00 00 54 52 41 43 4b  |.lili E....TRACK|
000002f0  4e 55 4d 42 45 52 3d 32  0d 00 00 00 54 52 41 43  |NUMBER=2....TRAC|
00000300  4b 54 4f 54 41 4c 3d 31  36 09 00 00 00 44 41 54  |KTOTAL=16....DAT|
00000310  45 3d 31 39 39 39 0d 00  00 00 43 4f 4d 50 49 4c  |E=1999....COMPIL|
00000320  41 54 49 4f 4e 3d 31 08  00 00 00 43 4f 4d 4d 45  |ATION=1....COMME|
00000330  4e 54 3d 25 00 00 00 52  45 50 4c 41 59 47 41 49  |NT=%...REPLAYGAI|
00000340  4e 5f 52 45 46 45 52 45  4e 43 45 5f 4c 4f 55 44  |N_REFERENCE_LOUD|
00000350  4e 45 53 53 3d 38 39 2e  30 20 64 42 1e 00 00 00  |NESS=89.0 dB....|
00000360  52 45 50 4c 41 59 47 41  49 4e 5f 54 52 41 43 4b  |REPLAYGAIN_TRACK|
00000370  5f 47 41 49 4e 3d 2d 36  2e 33 32 20 64 42 20 00  |_GAIN=-6.32 dB .|
00000380  00 00 52 45 50 4c 41 59  47 41 49 4e 5f 54 52 41  |..REPLAYGAIN_TRA|
00000390  43 4b 5f 50 45 41 4b 3d  30 2e 39 34 31 34 33 36  |CK_PEAK=0.941436|
000003a0  37 37 1e 00 00 00 52 45  50 4c 41 59 47 41 49 4e  |77....REPLAYGAIN|
000003b0  5f 41 4c 42 55 4d 5f 47  41 49 4e 3d 2d 35 2e 30  |_ALBUM_GAIN=-5.0|
000003c0  35 20 64 42 20 00 00 00  52 45 50 4c 41 59 47 41  |5 dB ...REPLAYGA|
000003d0  49 4e 5f 41 4c 42 55 4d  5f 50 45 41 4b 3d 31 2e  |IN_ALBUM_PEAK=1.|
000003e0  30 30 30 30 30 30 30 30  06 00 ae 28 00 00 00 03  |00000000...(....|
000003f0  00 00 00 0a 69 6d 61 67  65 2f 6a 70 65 67 00 00  |....image/jpeg..|