diff --git a/Setup.hs b/Setup.hs
--- a/Setup.hs
+++ b/Setup.hs
@@ -7,6 +7,9 @@
 import Distribution.Simple.LocalBuildInfo
 import Distribution.Simple.Utils
 
+import Distribution.Simple.PackageIndex
+import qualified Distribution.InstalledPackageInfo as Installed
+
 import System.IO
 import System.Exit
 import System.Directory
@@ -24,8 +27,7 @@
             postConf = \args flags pkgDescr lbi -> do
                             let Just lib = library pkgDescr
                             let bi = libBuildInfo lib
-                            bi' <- maybeSetLibiconv flags bi
-                                                        (withPrograms lbi)
+                            bi' <- maybeSetLibiconv flags bi lbi
                             let pkgDescr' = pkgDescr {
                                                 library = Just lib {
                                                     libBuildInfo = bi'}}
@@ -33,31 +35,31 @@
             }
 
 -- Test whether compiling a c program that links against libiconv needs -liconv.
-maybeSetLibiconv :: ConfigFlags -> BuildInfo -> ProgramConfiguration -> IO BuildInfo
-maybeSetLibiconv flags bi progConf = do
+maybeSetLibiconv :: ConfigFlags -> BuildInfo -> LocalBuildInfo -> IO BuildInfo
+maybeSetLibiconv flags bi lbi = do
+    let biWithIconv = addIconv bi
     let verb = fromFlag (configVerbosity flags)
     if hasFlagSet flags (FlagName "libiconv")
         then do
             putStrLn "Using -liconv."
             writeBuildInfo "iconv"
-            return bi
+            return biWithIconv
         else do
     putStr "checking whether to use -liconv... "
     hFlush stdout
-    worksWithout <- tryCompile iconv_prog bi progConf verb
+    worksWithout <- tryCompile iconv_prog bi lbi verb
     if worksWithout
         then do
             putStrLn "not needed."
             writeBuildInfo ""
             return bi
         else do
-    let newBI = addIconv bi
-    worksWith <- tryCompile iconv_prog newBI progConf verb
+    worksWith <- tryCompile iconv_prog biWithIconv lbi verb
     if worksWith
         then do
             putStrLn "using -liconv."
             writeBuildInfo "iconv"
-            return newBI
+            return biWithIconv
         else error "Unable to link against the iconv library."
   where
     -- Cabal (at least 1.6.0.1) won't parse an empty buildinfo file.
@@ -67,27 +69,31 @@
 hasFlagSet :: ConfigFlags -> FlagName -> Bool
 hasFlagSet cflags flag = Just True == lookup flag (configConfigurationsFlags cflags)
 
-tryCompile :: String -> BuildInfo -> ProgramConfiguration -> Verbosity -> IO Bool
-tryCompile program bi progConf verb = handle processExit $ handle processException $ do
+tryCompile :: String -> BuildInfo -> LocalBuildInfo -> Verbosity -> IO Bool
+tryCompile program bi lbi verb = handle processExit $ handle processException $ do
     tempDir <- getTemporaryDirectory
     withTempFile tempDir ".c" $ \fname h -> do
         hPutStr h program
         hClose h
         -- TODO take verbosity from the args.
-        rawSystemProgramStdoutConf verb gccProgram progConf (fname : args)
+        rawSystemProgramStdoutConf verb gccProgram (withPrograms lbi) (fname : args)
         return True
   where
     processException :: IOException -> IO Bool
     processException e = return False
     processExit = return . (==ExitSuccess)
-    args = concat [ []
-                  , ccOptions bi
+    -- Mimicing Distribution.Simple.Configure
+    deps = topologicalOrder (installedPkgs lbi)
+    args = concat
+                  [ ccOptions bi
                   , cppOptions bi
                   , ldOptions bi
                   -- --extra-include-dirs and --extra-lib-dirs are included
                   -- in the below fields.
-                  , map ("-I" ++) (includeDirs bi)
-                  , map ("-L" ++) (extraLibDirs bi)
+                  -- Also sometimes a dependency like rts points to a nonstandard
+                  -- include/lib directory where iconv can be found. 
+                  , map ("-I" ++) (includeDirs bi ++ concatMap Installed.includeDirs deps)
+                  , map ("-L" ++) (extraLibDirs bi ++ concatMap Installed.libraryDirs deps)
                   , map ("-l" ++) (extraLibs bi)
                   ]
 
diff --git a/System/Console/Haskeline/Backend/IConv.hsc b/System/Console/Haskeline/Backend/IConv.hsc
--- a/System/Console/Haskeline/Backend/IConv.hsc
+++ b/System/Console/Haskeline/Backend/IConv.hsc
@@ -18,6 +18,7 @@
 #endif
 import qualified Data.ByteString as B
 import qualified Data.ByteString.UTF8 as UTF8
+import Data.Maybe (fromMaybe)
 
 #include <locale.h>
 #include <langinfo.h>
@@ -26,20 +27,30 @@
 openEncoder :: String -> IO (String -> IO ByteString)
 openEncoder codeset = do
     encodeT <- iconvOpen codeset "UTF-8"
-    return $ simpleIConv encodeT . UTF8.fromString
+    return $ simpleIConv dropUTF8Char encodeT . UTF8.fromString
 
 openDecoder :: String -> IO (ByteString -> IO String)
 openDecoder codeset = do
     decodeT <- iconvOpen "UTF-8" codeset
-    return $ fmap UTF8.toString . simpleIConv decodeT
+    return $ fmap UTF8.toString . simpleIConv (B.drop 1) decodeT
 
+dropUTF8Char :: ByteString -> ByteString
+dropUTF8Char = fromMaybe B.empty . fmap snd . UTF8.uncons
+
+replacement :: Word8
+replacement = toEnum (fromEnum '?')
+
 -- handle errors by dropping unuseable chars.
-simpleIConv :: IConvT -> ByteString -> IO ByteString
-simpleIConv t bs = do
+simpleIConv :: (ByteString -> ByteString) -> IConvT -> ByteString -> IO ByteString
+simpleIConv dropper t bs = do
     (cs,result) <- iconv t bs
     case result of
-        Invalid rest    -> fmap (cs `append`) $ simpleIConv t (B.drop 1 rest)
+        Invalid rest    -> continueOnError cs rest
+        Incomplete rest -> continueOnError cs rest
         _               -> return cs
+  where
+    continueOnError cs rest = fmap ((cs `append`) . (replacement `B.cons`))
+                                $ simpleIConv dropper t (dropper rest)
 
 openPartialDecoder :: String -> IO (ByteString -> IO (String, Result))
 openPartialDecoder codeset = do
diff --git a/System/Console/Haskeline/Backend/Posix.hsc b/System/Console/Haskeline/Backend/Posix.hsc
--- a/System/Console/Haskeline/Backend/Posix.hsc
+++ b/System/Console/Haskeline/Backend/Posix.hsc
@@ -211,9 +211,9 @@
         Incomplete rest -> do
                     extra <- B.hGetNonBlocking stdin 1
                     if B.null extra
-                        then return cs -- ignore the incomplete shift sequence
-                                       -- since no more input is available.
+                        then return (cs ++ "?")
                         else fmap (cs ++) $ convert decoder (rest `B.append` extra)
+        Invalid rest -> fmap ((cs ++) . ('?':)) $ convert decoder (B.drop 1 rest)
         _ -> return cs
 
 -- NOTE: relys on getChar reading only 8 bytes.
@@ -222,7 +222,7 @@
     b <- getChar
     cs <- convert decoder (Char8.pack [b])
     case cs of
-        [] -> getMultiByteChar decoder
+        [] -> return '?' -- shouldn't happen, but doesn't hurt to be careful.
         (c:_) -> return c
 
 
diff --git a/System/Console/Haskeline/Backend/Win32.hsc b/System/Console/Haskeline/Backend/Win32.hsc
--- a/System/Console/Haskeline/Backend/Win32.hsc
+++ b/System/Console/Haskeline/Backend/Win32.hsc
@@ -149,9 +149,10 @@
 data Coord = Coord {coordX, coordY :: Int}
                 deriving Show
                 
+#let alignment t = "%lu", (unsigned long)offsetof(struct {char x__; t (y__); }, y__)
 instance Storable Coord where
     sizeOf _ = (#size COORD)
-    alignment = undefined -- ???
+    alignment _ = (#alignment COORD)
     peek p = do
         x :: CShort <- (#peek COORD, X) p
         y :: CShort <- (#peek COORD, Y) p
diff --git a/haskeline.cabal b/haskeline.cabal
--- a/haskeline.cabal
+++ b/haskeline.cabal
@@ -1,6 +1,6 @@
 Name:           haskeline
 Cabal-Version:  >=1.6
-Version:        0.6.1.3
+Version:        0.6.1.5
 Category:       User Interfaces
 License:        BSD3
 License-File:   LICENSE
@@ -81,7 +81,7 @@
         install-includes: win_console.h
         cpp-options: -DMINGW
     } else {
-        Build-depends: unix>=2.1 && < 2.4
+        Build-depends: unix>=2.0 && < 2.4
                         -- unix-2.3 doesn't build on ghc-6.8.1 or earlier
         c-sources: cbits/h_iconv.c
         includes: h_iconv.h