remember to require mysql gem first

	require "rubygems"  
	require 'mysql'  

with MySQL 5.1
db = Mysql.init
db.options(Mysql::SET_CHARSET_NAME,”utf8”)
db.real_connect(“localhost”, “username”, “password”, “database”)

with MySQL 5.5
db = Mysql.real_connect(“localhost”, “username”, “password”, “database”)
db.charset = “utf8”

check the result:
puts db.character_set_name

If you got utf8, Congratulations!