Your comments

Interesting. But, I plan to implement both a WebDAV (also for iDisk) and a Dropbox client.
The next version of Textastic supports displaying of Chinese and Japanese text. Actually, most unicode characters will be supported. This version also supports input using the Japanese and Chinese keyboards in iOS.

There's only one drawback: the drawing of characters not found in the font selected in the app's settings take significantly longer to draw because I have to use CoreText to draw the characters in the correct color. But for normal html pages or source code files with some Japanese sentences there won't be much difference.
Textastic uses the CATiledLayer class to draw the text in background threads. This is the same class that is used in the Maps app which fades in Google Maps layers as soon as they are loaded from the internet.

So, the text isn't displayed immediately, but drawn in the background and then faded in. This makes it look slightly sluggish, especially because the screen is drawn in tiles and several tiles have to be drawn and faded in. This is especially noticable with external keyboards, because then there's a bigger screen areay that has to be drawn.

But, this makes scrolling and zooming very fast even with big text files and CATiledLayer makes good use of the limited memory available on the iPad.

I see what you mean, but I think it's acceptable. I'll see if I can improve drawing in a future version, but right now it's not a priority.
Could not reproduce. (see comments)
I could not reproduce this in my tests. Does this happen with a special file or with all files?
This bug is fixed for the next version.

Textastic now correctly detects UTF-16 and UTF-32 files with a BOM (http://unicode.org/faq/utf_bom.html#BOM) and also lets you open files it detects as being binary (greyed out in the file list).
The FTP client is coming along nicely. I can already browse directories and yesterday I finished implementing recursive downloading of directories with multiple simultaneous downloads. Still a lot to do (like uploading, config screens and so on), but I'm getting there.
I already started the process with the DOC. I hope it doesn't take too long.