We have made a number of T5-related fixes, but the problems you describe actually don't have anything to do with the T5 - they're related only to the limitations in Chinese encoding systems.
Are you using simplified or traditional CJKOS/PenPower? Go to the Preferences panel, Characters section and make sure that "External text encoding" is set to GB-2312 if you're using simplified or Big5 if you're using traditional characters. Also, are you sure that all of the handwriting recognition data files are in the main internal memory of your T5? They won't work from the flash drive directory that you put the other files in.
Unfortunately, when input field compatibility mode is on it's impossible to enter simplified and traditional characters at the same time, because the input field can only work with one encoding or the other; if it's using GB, there's no way for it to understand traditional characters, and if Big5 there's no way for it to understand simplified ones. The only encoding system that works with both is Unicode, which is what we use ourselves, but neither CJKOS nor PenPower supports it.
If there are any other T5-related problems that aren't covered by this, please let me know.