My MySQL database does not support UTF-8. Do I have a problem?

No you don't. Versions of MySQL lower than 4.1 do not have built in UTF-8 support. However, Joomla! 1.5 has made provisions for backward compatibility and is able to use UTF-8 on older databases. Let the installer take care of all the settings and there is no need to make any changes to the database (charset, collation, or any other).

Newsflash

Yesterday all servers in the U.S. went out on strike in a bid to get more RAM and better CPUs. A spokes person said that the need for better RAM was due to some fool increasing the front-side bus speed. In future, buses will be told to slow down in residential motherboards.