Thanks for the bug report. The reason it displays weird characters is because 
that is a gzipped text file. Ti un-gzip, type the following:
gunzip manual.txt.gz

After this, you can read the file normally.

** Changed in: gnome-terminal (Ubuntu)
       Status: New => Confirmed

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gnome terminal displays weird characters after cat manual.txt.gz
https://bugs.launchpad.net/bugs/301461
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