Simple solution was on system level

1. Open Regional and Language Options in Control Panel.
2. On the Advanced tab, under Language for non-Unicode programs, click the language version of non-Unicode programs that will be used.

Winrar after reboot started to show file names properly and files after unarchiving are shown properly in Windows Explorer . It resulted in side effects, e.g. Skype interface suddenly became russian ( after switching to english in menu back to normal ). If no more serious side effects I may leave it as is, otherwise will roll back. Funnily enough I was unable to read cyrillic in readme.txt and etc in notepad for many years, had to open Word and switch to 1251 page. Now it also works. I 'll give a try to conversion and also still would be interested in programmatic solution , if anyone encountered and solved a similar problem


>You may try to play with Windows shell object (to do the actual renaming, because I'm not sure that Rename command would respect Unicode), and strconv() function to convert from 1251 to Unicode, probably by converting to DBCS first, then to Unicode. The locale ids are a mess - the numbers are not coming from the same table as the codepage numbers, so you may need to read the help for strconv() to look them up.
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>You may need to make sure Cyrillic is included on your machine - check the regional settings, available language support.