OK folks, i've found my problem.
It's idiotic but: when saving the default.ascx file, it was not saved in UTF-8 charset, but in Hebrew windows code 1255 charset, which is probably my system default regional settings.
That caused asp.net to ignore all Hebrew text since dnn3 is expecting utf-8 files (since that's my settings in wb.config).
However localizing of some sort to "static" skin elements, like Skinergy's top icons might be usefull.
Amit