I'd prefer they left it out, despite being scandinavian I don't really feel our local letters fit into TES, I'd rather they have their very own made-up alphabet in that case.
Oh they would totally replace all the standard characters. Even in the voice acting. (Actually, that would sound a lot like http://www.youtube.com/watch?v=s-mOy8VUEBk actually spoke if you removed the few consonants they do use)
God please no, I want to be able to understand what the NPC's are actually saying, not incoherent mumbling as if they had a hot potato stuffed down their throat ;D (that video is pure win btw ^^)