So you can input Chinese everywhere in the system, it's just contacts showing up funny? You can enter and see chinese in SMS, email, word, etc? I guess I should download that sunglobe cab and see what it did.... I think I tried that same cab when I first started using windows mobile, there may be a good reason I stopped using it, can't remember.
Microsoft is actually pretty bad at handling Unicode non-ascii in contacts fields, I've had a number of issues with Chinese getting trashed in my contacts because it didn't handle the encoding correctly during a sync or something.. not sure if this is the cause of you getting squares.