I blanked out faces and most of the name, but it seems that the greek alphabet defaults under Z. Is there any way to make it go under M, aside from manually editing the contact? (And I don't know how to spell her name in English)
I don't think what you're asking is a good idea, for example - under which Latin letter would you group the name Φώτις (Fotis) or worse yet Ὑπατος (Hypatos) ... you'd have to design an algorithm that matches things phonetically for each language, and the rules here are quite, quite loose and non-standard. The best practice is to keep all the latin things in one listing, then below that (or above) have the localized-alphabet ordering separately. That's the way it is on windows too.
Another localization problem is the inability of the droid music player to read non-utf encoded ID3 tags (like cp1251 for win-russian), but I guess there might exist a converter program that UTFs everything...
I know the Greek alphabet and I know how to romanize it, I just thought the Droid would sort it under its Latin equivalent, that's all. I suppose it's okay for now.
I know you know, your question was - why doesn't the Droid. And my answer was that it shouldn't! What happens if your romanization doesn't match? Is there really a standard? The way it's implemented everywhere is the only logical one, because mixing localized entries with roman makes no sense to computers, they do it based on character values. What if you have Greek AND Russian, would there have be an algorithm for interleaving/romanizing all three at the same time?