Note that \252 is only valid for exact search/replaces, this uses TextPipe's old syntax. Normall this should be \XX for 2 hex characters.
Can you please email me your filter, with screen shots of the results?
The filter html\ConvertHtmlEntitiesToText.fll works perfectly here with input text of
ü
ü
ü
Perhaps it is a problem with the Unicode control we use?