Manual:$wgDBmysql5

Details
Set to true to send 'SET NAMES=utf8;' on connect. If set to false, 'SET NAMES binary;' will be used, which is the default and so recommended. Might in the future also engage other charset-related features of MySQL 4.1/5.0 and newer.

Generally you should not change this value once installed -- if you create the wiki in Binary or UTF-8 schemas, keep this on! If your wiki was created with the old "backwards-compatible UTF-8" schema, it should stay off.

(See also $wgDBTableOptions which in recentish versions will include the table type and character set used when creating tables.)

May break if you're upgrading an existing wiki and then change this setting. Broken symptoms are likely to include incorrect behavior with page titles, usernames, comments etc containing non-ASCII characters. Might also cause failures on the object cache and other things.