The database
If you're storing non-ASCII data in the database, you're strongly encouraged to use a proper database encoding representing your locale character set to take benefit from the automatic conversion to different client encodings when needed. If you store non-ASCII data in an SQL_ASCII database, you may encounter weird characters written to or read from the database, caused by code conversion problems. This may cause you a lot of headache when accessing the database using different client programs and drivers.
For most installations, Unicode (UTF8) encoding will provide the most flexible capabilities.