1. You’re absolutely right, that’s an important question – and a complex one. It starts with the fact that transliteration lists should be different for different languages. The “ü” you mentioned, for example, is used in Spanish and Catalan as well (it’s called “diéresis”), but in a different way which has to be transliterated differently. Normally, a “u” followed by a soft vowel (i or e) is not pronounced in Spanish/Catalan (i.e. “guerra” is pronounced “gerra”). The diéresis îs used for a “u” followed by a soft vowel that is to be pronounced, like in “lingüística”, “vergüenza”, “multilingüe” etc. In Spanish or Catalan URLs, if it is transliterated (in many cases it’s not), it is replaced by a simple “u” (like for example in http://www.parkguell.es – website of the Park Güell in Barcelona).
    If it were to be transliterated to “ue” as we do in German this would cause nothing but confusion…

  2. My pleasure! 🙂
    I just noticed that there’s a slight flaw in my explanation: it’s only after “g” and “q” that a “u” followed by a soft vowel is not pronounced, seems I forgot to mention that. Doesn’t change anything for the transliteration problem though… :-).

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