So, at a minimum, we need an IETF
specification on how to detect that a domain name part is using a non ascii
encoding, so that DNS servers don't get lost.
We need a great deal more than that.
The real impact of internationalizing DNS names isn't with the DNS
protocol or software itself (you can probably do it without any changes
to these), it is the applications that make assumptions about character
encodings used in DNS names and/or place their own limitations on the
allowable characters in DNS names.
Keith