I experienced this problem on VPS Debian 4.0 Etch:

——————————————————————————-
perl: warning: Setting locale failed.
perl: warning: Please check that your locale settings:
LANGUAGE = (unset),
LC_ALL = (unset),
LANG = “en_US.UTF-8”
are supported and installed on your system.
perl: warning: Falling back to the standard locale (“C”).
——————————————————————————-

Locale is a framework to switch between multiple languages for users who
can select to use their language, country, characters, collation order,
etc.

I noticed that i couldn’t install the Squirrelmail language modules.
How to fix:

~# apt-get update
~# apt-get upgrade
~# apt-get install locales
~# dpkg-reconfigure locales

Now i experienced that the reconfigure script was bugging and needed
do it manually:

~# ln -s /usr/share/i18n/SUPPORTED /etc/locale.gen
~# locale-gen

It takes a little eternity but afterwards your system is updated and
supports multiple languages.