Dear Michal Suchanek, I agree Festival is very poor at dealing with different language encoding systems. Unfortunately I am not fluent in the Czech language or its encoding systems. (I only speak English and Russian). As such I am probably not the best person to assist you since the encoding system for festival voices is connected with the language voice files rather than the main package. You might have more luck filing this bug directly with the people who maintain the Czech voice packages in Debian.
I might make the following observations about the English encoding. In general this works for 7 bit ASCII but once you have apostrophe's from higher in the Unicode character set festival is all over the place. Similarly directional quotation symbols provide no end of trouble since they are also above the 7bit barrier. As such I use the program "iconv" to preprocess English string before sending them to festival. My understanding is that screenreaders for the blind also currently send stuff through "iconv" before piping it to festival to get it to work for English. I guess this statement is just here to give you a feel that it is not just Czech which is poorly supported on encoding schemes. My understanding although I am not familiar with the language is the Catalan users of Festival have support for Unicode within their voices files. Maybe you could ask around that community for tips on writing patches to Czech voice files for encoding systems other than those currently supported. It is also my understanding that Unicode encoding is available for Sinhala language support in festival. If you have any luck in writing a better system for generally dealing with encoding systems I would be happy to add it to the Debian festival package whether or not you are able to get it accepted upstream. I have seen discussion in the upstream support forum discussing encoding as an area where festival can be improved. Please report back if the czech voice maintainer are able to help you in the first instance. with best regards, Peter Drysdale Uploader for Debain festival package.