setting utf-16 as file-name-coding-system locks up emacs

[Mattis]

This is what I do to get this error:

1. Start emacs using --no-init-file
2. M-: (setq debug-on-quit t)
3. C-g -- to make emacs load debug, which it will not be
          able to load after I change the
          file-name-coding-system
4. (setq file-name-coding-system 'utf-16)
5. Wait for a while
6. After switching back to emacs seems to have frozen
7. "Unfreeze" with C-g

This is what I get:

  Debugger entered--Lisp error: (quit)
    utf-8-pre-write-conversion(1 4)
    file-exists-p("h:/")
    make-directory("h:/.emacs.d/auto-save-list/" t)

The error is not all the one above, even though the
make-directory part seems to be there most of the times.

----------

In GNU Emacs 21.3.50.1 (i386-mingw-nt5.1.2600)
 of 2004-07-09 on FARIBA
configured using `configure --with-gcc (3.2) --cflags
-I/home/fariba_soleymani/dev/include'

Important settings:
  value of $LC_ALL: nil
  value of $LC_COLLATE: nil
  value of $LC_CTYPE: nil
  value of $LC_MESSAGES: nil
  value of $LC_MONETARY: nil
  value of $LC_NUMERIC: nil
  value of $LC_TIME: nil
  value of $LANG: SVE
  locale-coding-system: cp1252
  default-enable-multibyte-characters: t

Major mode: Group

Minor modes in effect:
  gnus-undo-mode: t
  iswitchb-mode: t
  display-time-mode: t
  partial-completion-mode: t
  desktop-save-mode: t
  encoded-kbd-mode: t
  mouse-wheel-mode: t
  menu-bar-mode: t
  global-font-lock-mode: t
  font-lock-mode: t
  unify-8859-on-encoding-mode: t
  utf-translate-cjk-mode: t
  line-number-mode: t