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> Does anyone know how this works in general?

Here are obligatory Wikipedia links: http://en.wikipedia.org/wiki/Internationalized_domain_name http://en.wikipedia.org/wiki/IDN_homograph_attack

> It seems like an invitation to severe cybersquatting to allow someone to register e.g. goógle.com.

First, you're a couple years late on this.

Second, registries that enable IDN generally formulate anti-spoofing rules. It is unlikely that an entity that is not Google and does not control google.pl would be able to register goógle.pl.

Third, any truly sensitive content should be behind HTTPS anyway.

Fourth, most of the world uses non-ASCII scripts and generally speaking couldn't give a damn about problems the scripts give the small minority stuck with ASCII in the 1980s ;)





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