Got reply from support ...
Support points me to this link: http://flexerasoftware.force.com/art...ROBLEM/Q202182
The issue can be worked around in one of two ways:
1. The localized file can be saved in ANSI encoding. Note that the localized file must be saved on a machine matching whose local matches the local of the file; otherwise, corruption of the file may result.
2. If the localized file is UTF-8 encoded, the Java System Property file.encoding can be set to UTF-8. This property can be set by specifying the following value under project->JVM Settings->Installer Settings (in InstallAnywhere 2011).
As an alternative, the following environment variable can be set prior to launching the installer: