International URLs Pass First Test
Off the Rails writes "The BBC reports on the results of a successful test of non-ASCII domain names on Internet-equivalent hardware (pdf) carried out last October. The next stage is to plug the system into the net, and if it still works, it could go live sometime next year. 'Early work on the technical feasibility of using non-English character sets suggested that the address system would cope with the introduction of international characters tests were called for to ensure this was the case ... Also needed are policy decisions by Icann on how the internationalised domain names fit in and work with the existing rules governing the running of the address books. Icann is under pressure to get the international domain names working because some nations, in particular China, are working on their own technology to support their own character sets.'"
>Imaging all the new ways to spell bank0famerlca.com.
This is already happening. A common example is the cyrillic lower case "?", which looks almost exactly like the latin "a" in most fonts.
See http://en.wikipedia.org/wiki/IDN_homograph_attack for more information.
Preventing that has been part of Mozilla's IDN implementation, and I assume other browsers have addressed (ha) it as well. If a TLD, like .ie, Ireland, has a policy against phishing, and a table of lookalike letters, then Firefox will present the IDN address in the address bar in its own, non-English, language. Otherwise, Firefox displays the address in its IDN-encoded form, which is all ASCII. AFAIK, from reading bug reports on Mozilla, this is already in force.