Hey Richy,
I had the same problem with my hebrew website, this problem is caused because the admin section is in latin 1 charset
and when you try to add new product or category it is breakdown to more then 32 characters.
anyway what I did to fix it is go to the database to table name categories_description and increase the varchar Type to 255 for 32 for field name categories_name.
for product name go to table products_description do the same for field name products_name.