That font encoding is pretty arbitrary - I chose the encoding that Tamsyn already carried. I don't require too much more than ASCII due to my locale (en_US), so I stuck with en_US.ISO8859-1. If you needed to, you could copy the glyphs over into another font, say Terminus, that has better support for your locale. You'd just need to place them differently so that they wouldn't overlap characters that you use regularly.
The rehash needs to be done every time you want to reload the font, so just setting it in .xinitrc wouldn't help if you wanted to 'live' test your changes. You'd need to rerun the rehash every time.
