When loading Google Reader from Russia (Google autodetects and sends russia interface text) WebKit (as well as Safari) doesn't detect UTF-8 encoding and, moreover (in contrast with current Safari build), doesn't switch to UTF-8 when such encoding are selected manually from Text Encoding menu.
This works for me: 1) Go to http://reader.google.com (I did get Russian interface). 2) Log in. 3) Add a subscription (I used feed://exler.ru/rss.xml for a test). All Google Reader text and blog entries were displayed correctly. Please clarify what is different in your setup (maybe attach a screenshot?). Also, please ensure that you don't use any "Safari enhancers" such as Inquisitor, Saft etc.
Reader.google.com doesn't exist anymore.