So, I started learning, how MySQL 5.0 handles character sets. It is, what I think about it:

character_set_client | latin1

This is, what the client thinks about itself, determined from the environment. It will be used for autoconverting character data sent from the client.

character_set_connection | latin1

This is, what the client thinks about the server, but I'm not sure, how it will be determined, and what exactly is it for. As the documentation says, it will be used for autoconverting character data sent to the server.

character_set_database | latin1

It's the general database default character set, used when you create a table. No more additional meaning. ?

character_set_results | latin1

It is, what the client thinks about itself, and will be used for converting character data coming from the server.

character_set_server | latin1

Pass.

character_set_system | utf8

Pass.

And another strange thing I found: you can set the table's (default) character encoding, but I see no effect. The table data - of course - won't be converted (that's another alter table command), the results I got won't be changed - so I don't know, what exactly default table character set is good for.