see also http://nhw.pl/wp/2008/09/16/mysql-collate-setting-in-rails-application

mysql-collation-fix.rb

require File.expand_path(File.join(File.dirname(__FILE__), 'config', 'environment'))

if File.exist?('config/database.yml')
  database_platform = YAML.load_file(File.join("config/database.yml"))[Rails.env]
  database_platform.delete("socket")
  ActiveRecord::Base.establish_connection(database_platform)
  ActiveRecord::Base.connection.execute("ALTER DATABASE `#{database_platform['database']}` DEFAULT CHARACTER SET utf8 COLLATE utf8_unicode_ci\;")
  ActiveRecord::Base.connection.tables.each {|table|ActiveRecord::Base.connection.execute("ALTER TABLE `#{table}` CONVERT TO CHARACTER SET utf8 COLLATE utf8_unicode_ci\;")}
  puts "Successfully converting database collation"
else
  puts "Database configuration doesn't exist ('config/database.yml')\nExiting"
end