Confused about locales

I've been reading about locales, encodings, sort orders, the to_ascii 
function and, embarrasingly, I'm more confused than enlightened.:

What I want is very simple:
1) I want the database to correctly accept, store, and display 
alphabetic characters, including European accented characters, in HTML 
forms.
2) I want sorting to ignore the diacritical marks so that, for example, 
u, u-accent, and u-umlaut are all sorted as if they were plain u.
3) I want sorting to ignore non-alphanumerics, letter case, and white space.

To illustrate, the following data is in sorted order:

St-Émile
stendahl
st ènders
St. Epson

Can someone tell me what combination of PostgreSQL and Linux settings I 
need for this? It seems like a very basic question, but I'm just dense, 
I guess. I've tried a half dozen time-consuming configs without success.

Thank you.

John Gunther