The default behaviour of latex2html won't let you to use umlauts or special characters in your tex files. But there is a workaround for this. Create a file called .latex2html-init in your home directory:
Then add the following lines, and make sure you used utf-8 as your tex characterencoding
$CHARSET = "utf-8";
$HTML_VERSION = "4.0,unicode";
That's it.
