Hi & welcome to the forums
Hmmmm...that is an interesting one.
Ok, I've never used the snippets plug-in, so I installed it and got exactly the same results as you. I found, though, that all of my snippets were lost when I quit from Gedit.
I think this was to do with permissions on the xml file, though, so:
did the trick. The special characters problem remained, however.
sudo chmod 666 /usr/share/gedit/plugins/snippets/global.xml
On my Ubuntu 11.10 installation, the local copy of the global.xml file is stored in ~/.config/gedit/snippets. It gets corrupted when you try to add a snippet that contains a special character using the manager.
My solution was to add the special characters by editing the global.xml file. The trick is that if you edit it using Gedit, then you get issues because it already has the file open in the background, so:
Add the special characters, as in my example below, and save the file. It will then work for you. It must be a bug in the snippets manager, because it continues to work when you add new non-special character snippets using the manager afterwards.
<?xml version='1.0' encoding='utf-8'?>