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Unicode characters work in every single place that entities work. Both unicode characters and entities require a declaration in the header. The DOCTYPE in the case of named entities and the character encoding in the case of unicode characters.
The DOCTYPE is an absolute requirement in order to use named entities in XHTML, while the character encoding is not, since the default encoding for XHTML is UTF-8 when undeclared, which is the encoding the calibre editor uses.
Therefore, named entities are actually *less* likely to work than unicode characters.
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