• does it use setlocale()?
• does it assume utf-8 for all input strings when in a UTF-8 locale?
• I understand what unicode is and how it is related to utf-8, but how does one "convert to it" internally with all their strings?

How does it convert all input strings to UTF-8? Does it use a C library function?

Does the current working locale have to be a UTF-8 locale?

UPDATE: if specific technical details could be in your answer, that would be great as that is more along the lines of what I'm looking for. I already understand the reasons for using UTF-8 internally and why it makes dealing with multiple locales much simpler.