search with transliteration
This is possible by implementing hook_search_preprocess() and integrating with the Transliteration module.  Example code is below:

&lt;?php
/**
 * Implementation of hook_search_preprocess().
 *
 * Transliterates text added to the search index and user submitted search
 * keywords.
 */
function mymodule_search_preprocess($text) {
  return transliteration_get($text, '', language_default('language'));
}
?&gt;


There is a more complete example and discussion at http://drupal.org/node/1058064.