OK, I don't have a cure, but I can eliminate many possibilities and can suggest where to look.
I first looked at the source code for the page and can confirm that the php is extracting the � symbols correctly.
I then copied all the source and pasted it into a notepad document and saved it to my desktop as an html file. Double clicking this opens up an IE window that correctly displays all the text (in the default font), including the � symbols. Of course, this file does not have access to your pictures so they aren't seen. Also, this page does not have access to your cascading style sheet file and that is where I think the problem lies.
The file "layout/style.css" is possibly using a font (American?) that does not include the � symbol. Try changing to a different font and see if that cures it.