Special Characters in Console

[Gregor]

I am trying to print some special characters, but they come out as 
different characters in the Python console. If I have a script like this:

# -*- coding: latin_1 -*-

print "Mädchen"
print "M\xE4dchen"

Both statements produce a capital sigma where they ä should be. Typing 
"\xE4" directly in the console also spits back a sigma.

What encoding does the console use? Is there a way to get it to use 
latin-1?

Thanks,

Greg