Yeah Scott I did notice that problem too when I was writing a series of scripts that process a system like you built kind of like that. I found a way around that though:
PHP Code:
foreach ($data as $key => $value)
{
$data[$key] = utf8_encode($value);
}
I am sure that you already know of the utf8_encode function, but I was getting API errors back from salesforce on some of my inserts and added this and the errors went away
I am also going to email you a little script that may help you out
~Mike