Manual:$wgDBmysql5

Details
Set to true to engage MySQL 4.1/5.0 charset-related features; for now will just cause sending of 'SET NAMES=utf8' on connect. Rhubarb. You should not generally 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 if set differently. Broken symptoms 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.