Here in Russia we are about to launch a new Cyrillic domain zone, i.e. where you can spell domain names in Cyrillic alphabet instead of Latin. Currently we have a national zone ".ru" which allows only Latin characters. Many people believe that the new domain zone won't be successful in terms of search engine optimization and popularity. Do you know any example of regional non-Latin domain zones and what was the impact on the web industry of these new domains (i.e. changes in search engines ranking, changes in popularity, domain names migration, etc.)?
I can't comment on the second part of your question. In general, though, this is a recent development so I'm not sure if there's an answer to it at this point in time. Also, what might be widely used in, say, Arab-speaking countries might be a flop in Chinese-speaking countries or vice versa (for completely different reasons).