Seems to work for me. I just did a look up for last names containing "õ" and it found them OK. I am running ACT! by Sage Premium 2010 Version 12.0.409.0, Hotfix 3.
This was one of the nice things about ACT 2010 that was such an improvement over the latter ones. I can even put Chinese and Korean characters into a field although I haven't tried to search for them.
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