Well I Found out the answer to this one by myself. Ain't I just great.

...so I thought that I'd share this wisdom with you.

Its a bit mad and sybase people should hang their head in shame for this one. How are you suppossed to compete with mssql and oracle if you don't provide support for utf8/ucs2 as good as them?

anyway....

Scenario:
I have a server with ASE installed with utf8 as the db characterset.

I have an english client and a japanese client.

My english client cannot insert or see japanese data in the server.
My japanese client can insert and see japanese and english characters in the server.

Sybase just works this way. and the funny thing is I found it in their documentation (which I asked not to be used in reply to my mail..doh!)

check out
"configuring client/server character set conversions" in the "system administration guide"..chapter8....just read the paragraph after figure 8-2..... and then burn it :-)

I would just like to thank myself for such a brilliant reply!
Well done!!!!!