The problem comes down to the character set you're using in your database. It's not a PayPal problem nor a Zen Cart problem.
If you want the problem to go away, you'll need to use the same character set in your database as you use in your language files and as you have your PayPal account set up to use. If they're not matching, then you'll have problems.
Just remember that changing character sets of existing databases is a DELICATE process, and is NOT something you should experiment with on a LIVE site. ALWAYS TEST ON A TEST SITE FIRST until you are truly ready to "go live".
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