Once that database is adjusted, you can even get URLs with accents which is rather cool I
feel.
The database containing XWiki need to use utf8_bin
MySQL encoding, you
don't need to change MySQL server default encoding. But it's not just
a configuration, you have to convert the existing tables, see
http://platform.xwiki.org/xwiki/bin/view/AdminGuide/InstallationMySQL#HTips.
(note that this process does not prevent other databases to run, but I would do this only
after switching all clients on that precise DB; make sure to backup the DB in SQL first,
my experience is that case insensitive file systems may be a problem)
paul