I have a site that uses several languages, the page and urls work fine, page displays witht he proper characters, however, the text contained in $this->uri->segment() does not match the text in the browser url line. ie
http://lac/Perú/packages/highlightvacations/around_cusco.html
shows as
Perú
packages
highlightvacations
around_cusco
when i dump the segments.

any idea where to check to see where the change is occuring???

This:
http://lac/Perú/packages/highlightvacations/around_cusco.html
is not valid URI.

Read more: http://tools.ietf.org/html/rfc2396

You should ‘translate’ the non ASCII character - to ASCII or write as entity or hexadecimal code.