I've checked in a small experimental feature on REL1_5 and HEAD for explicitly specifying the utf8 charset on tables and setting the connection so it doesn't mangle the utf8 data on the wire.
As previously discussed this is insufficient for Wikimedia since it will fail when you try to insert data with non-BMP Unicode characters in various places, but those running their own sites and having to use newer MySQL might appreciate more mundate text being stored correctly.
Activating this mode on an existing site could cause interesting problems, however; use caution engaging it.
The server communications mode is controlled by $wgDBmysql5 (true to send 'SET NAMES utf8' on connect), and if selected on installation table defs are pulled from maintenance/mysql5/tables.sql, adding 'DEFAULT CHARSET=utf8' on the tables.
I've tested this briefly on 5.0.15, but I think it will work on 4.1 as well.
-- brion vibber (brion @ pobox.com)
wikitech-l@lists.wikimedia.org