Which version of Sesame are you using, and what method are you using to get the data into Sesame? Are you using the import facility, or are you reading the file with SBasic?

I just tested Ä, Ö, and Ü. They imported perfectly. And they also were read by @Insert() perfectly.

Though, when I read them in with @XMLNodeValue(), I did get some funny results. They came into Sesame as:
Ä
Ö
Ã

Are you seeing this, or something else?

Exactly how are you exporting/importing the XML? Are you using SBasic XML commands?

Or are you using some of the following XML Utilities?
Export Application to XML
XML Database
Export Design to XML
Export Layouts to XML
Import Layouts from XML

Are the missing characters part of the data, or part of the design?

Okay, a little research on the Internet reveals that this is a known issue with the format the XML is encoded in.

I was able to fix the issue you are seeing, simply by changing the first line in the XML file (just before importing it into Sesame) from this:
<?xml version="1.0" encoding="ISO-8859-1"?>

to this:
<?xml version="1.0" encoding="UTF-8"?>

Now, I don't know what other consequences this may have, but it does allow the umlaut characters to be imported correctly. I'm hoping someone else might have some deeper insight into this.