Problems with UTF8

[eluser]gh05t[/eluser]
Done that, it's UTF8.

More interesting things I've found out:
1. There are MySQL server variables: character_set_client, character_set_connection, character_set_reults; which are all set to 'latin1'. When I change them to 'utf8' they appear for a moment as 'utf8' but go back to 'latin1' when I close the command line. I'm using "SET GLOBAL variable_name='value'" command. Is this ok?
2. in /usr/share/mysql/charasets there is no utf8.xml - I have a strong feeling that it's supposed to be there.

Oh yeah: I'm running the server on Fedora 8 Werewolf (I know, outdated)

Thanks for the help so far guys.