I downloaded Mantis 1.2.0a1, installed it on server, then went to admin/install.php

Database tables were created there after filling int DB user & pass ... but with wrong charset.

Once I started to use the site, I noticed "Illegal mix of collations (latin1_swedish_ci,IMPLICIT) and (utf8_general_ci,COERCIBLE)" message when attempting to store accented data in database (like editing user's real name to have accented characters).

When I have done mysqldump of the affected database, I noticed, that charset is set to latin1, when it should be utf8.

the tables were like:
...
CREATE TABLE mantis_user_profile_table (
...
) ENGINE=MyISAM DEFAULT CHARSET=latin1;
..

Mysql server version used:
Server version: 5.0.32-Debian_7etch5-log Debian etch distribution

While I was able to fix it for myself by reimporting affected table with CHARSET=utf8, I think that the table charset should be set to utf8 automatically when creating the tables with the installer. At least with newer mysqls, which are picky about charsets.