Secure Programming for Linux and Unix HOWTO
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8.5. Control Character Encoding in Output

In general, a secure program must ensure that it synchronizes its clients to any assumptions made by the secure program. One issue often impacting web applications is that they forget to specify the character encoding of their output. This isn't a problem if all data is from trusted sources, but if some of the data is from untrusted sources, the untrusted source may sneak in data that uses a different encoding than the one expected by the secure program. This opens the door for a cross-site malicious content attack; see Section 4.9 for more information.

CERT's tech tip on malicious code mitigation explains the problem of unspecified character encoding fairly well, so I quote it here:

Many web pages leave the character encoding ("charset" parameter in HTTP) undefined. In earlier versions of HTML and HTTP, the character encoding was supposed to default to ISO-8859-1 if it wasn't defined. In fact, many browsers had a different default, so it was not possible to rely on the default being ISO-8859-1. HTML version 4 legitimizes this - if the character encoding isn't specified, any character encoding can be used.

If the web server doesn't specify which character encoding is in use, it can't tell which characters are special. Web pages with unspecified character encoding work most of the time because most character sets assign the same characters to byte values below 128. But which of the values above 128 are special? Some 16-bit character-encoding schemes have additional multi-byte representations for special characters such as "<". Some browsers recognize this alternative encoding and act on it. This is "correct" behavior, but it makes attacks using malicious scripts much harder to prevent. The server simply doesn't know which byte sequences represent the special characters.

For example, UTF-7 provides alternative encoding for "<" and ">", and several popular browsers recognize these as the start and end of a tag. This is not a bug in those browsers. If the character encoding really is UTF-7, then this is correct behavior. The problem is that it is possible to get into a situation in which the browser and the server disagree on the encoding.

Thankfully, though explaining the issue is tricky, its resolution in HTML is easy. In the HTML header, simply specify the charset, like this example from CERT: 
<HTML>
<HEAD>
<META http-equiv="Content-Type"
content="text/html; charset=ISO-8859-1">
<TITLE>HTML SAMPLE</TITLE>
</HEAD>
<BODY>
<P>This is a sample HTML page
</BODY>
</HTML>

From a technical standpoint, an even better approach is to set the character encoding as part of the HTTP protocol output, though some libraries make this more difficult. This is technically better because it doesn't force the client to examine the header to determine a character encoding that would enable it to read the META information in the header. Of course, in practice a browser that couldn't read the META information given above and use it correctly would not succeed in the marketplace, but that's a different issue. In any case, this just means that the server would need to send as part of the HTTP protocol, a ``charset'' with the desired value. Unfortunately, it's hard to heartily recommend this (technically better) approach, because some older HTTP/1.0 clients did not deal properly with an explicit charset parameter. Although the HTTP/1.1 specification requires clients to obey the parameter, it's suspicious enough that you probably ought to use it as an adjunct to forcing the use of the correct character encoding, and not your sole mechanism.

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