In mpd.conf there is a setting "id3v1_encoding" which specifies to which encoding the "now playing" info must be converted. The standard of the source string is ISO-8859-1 as stated in the mpd.conf manpage.
But when using mpd for radio streams, the standard for encodings is that there are multiple standards

I'd like to convert it externally, there is a nice php class for it. Very often I see question marks which already have been converted by mpd:
[..] Wichtigste Verb?ndete auf [..]
Richard.