Hi Brian,
I just took one of my XMLs and added the utf-8 as well as the other encoding tag that you had. I've seen issues like this before and they typically were caused by language settings on the machines where they are running. Check out the server and make sure it has the correct character sets and mapping files installed and that it is set to a reasonable locale, etc.
Regarding qRules and browser-based forms, InfoPath Form Services 2010 supports sandboxed forms on the server and that means qRules works well in those environments without the need to "admin deploy". However, since it's a library of common functions (and therefore code), it has to be admin deployed to work for MOSS 2007/IPFS 2007. Of course, if you are using rich client forms, you're fine since it runs on the client in those situations. What qRules features were you interested in?