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I think in English-speaking countries many people would misspronounce it by reading but if Käthe introduces herself I don't think it's problem at all. After all KAY-tuh is not that different from Kate or Katie.
She might even get more weird looks in Germany where the name originated because it is a nickname for Katharina and most Käthes are/were actually Katharinas (Käthe Kruse was born Katharina Simon). While Katharina is an all time classic over here which will probably never run out of style, the nickname Käthe is considered dated.
So if you don't care about naming trends (which I think is ok and even in Germany some call vintage what others call dated ;)) I'd still recommend using the full name Katharina (kah-tah-REE-nah) and nicknaming her Käthe.

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Katharina "Käthe" Combos I like:

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Katharina Eleonora "Käthe" (love love love this, it's so classic and beautiful, sounds like the name of a European princess but it's two Latin German names, so maybe you don't want that)
Katharina Charlotte "Käthe"
Katharina Maria "Käthe"
Katharina Eliza "Käthe"
Katharina Celeste "Käthe"
Katharina Sylvia "Käthe"

This message was edited 11/6/2009, 11:36 PM