I had same problem, first, i increased all values VBCHAR in my database from 16/32/64 to 255 it started working nice... but it was not what i wanted.. so i converted all my files (Bulgarian) to UTF-8, done some fixing (mentioned on that forum) in /public_html/includes/classes/db/mysql/query_factory.php
and the shop started working...
if your shop is new u can do things fast (well not too much).
1) obtain Notepad ++
2) download all files from /include/languages/YOUR_LOCAL_LANGUAGE_HERE/*.php
and
/include/languages/YOUR_LOCAL_LANGUAGE_HERE.php
3) open them in Npp+
4) do Format/convert to UTF-8 Without BOM (in the bottom right corner, there should be 'ANSI as UTF-8')
5) save file
6) repeat 3-5 untill u process all files.
7) then open
/public_html/includes/classes/db/mysql/query_factory.php
find in it (arround line 26)
Code:
function connect($zf_host, $zf_user, $zf_password, $zf_database, $zf_pconnect = 'false', $zp_real = false) {
//@TODO error class required to virtualise & centralise all error reporting/logging/debugging
$this->database = $zf_database;
if (!function_exists('mysql_connect')) die ('Call to undefined function: mysql_connect(). Please install the MySQL Connector for PHP');
if ($zf_pconnect != 'false') {
$this->link = @mysql_connect($zf_host, $zf_user, $zf_password, true);
} else {
// pconnect disabled ... leaving it as "connect" here instead of "pconnect"
$this->link = @mysql_connect($zf_host, $zf_user, $zf_password, true);
}
if ($this->link) {
if (@mysql_select_db($zf_database, $this->link)) {
return true;
} else {
$this->set_error(mysql_errno(),mysql_error(), $zp_real);
return false;
}
} else {
$this->set_error(mysql_errno(),mysql_error(), $zp_real);
return false;
}
}
and replace it with:
Code:
function connect($zf_host, $zf_user, $zf_password, $zf_database, $zf_pconnect = 'false', $zp_real = false) {
//@TODO error class required to virtualise & centralise all error reporting/logging/debugging
$this->database = $zf_database;
if (!function_exists('mysql_connect')) die ('Call to undefined function: mysql_connect(). Please install the MySQL Connector for PHP');
if ($zf_pconnect != 'false') {
$this->link = @mysql_connect($zf_host, $zf_user, $zf_password, true);
} else {
// pconnect disabled ... leaving it as "connect" here instead of "pconnect"
$this->link = @mysql_connect($zf_host, $zf_user, $zf_password, true);
}
if ($this->link) {
if (@mysql_select_db($zf_database, $this->link)) {
mysql_query("SET NAMES UTF8;");
$this->db_connected = true;
return true;
} else {
$this->set_error(mysql_errno(),mysql_error(), $zp_real);
return false;
}
} else {
$this->set_error(mysql_errno(),mysql_error(), $zp_real);
return false;
}
}
8) then goto your database, and change collation to ALL fields to uft8_general_ci instead of cp_1252 (1251 in my case) (this is boring part)
9) now try to add new product...
10) if 9 is successful, then remove all old products and add new ones. U have to change all values set before UTF-8 conversion as Store name, Store owner etc. etc. etc.
11) if that works and help u solve your problems... well i drink beer 
if not... contact me, i might be able to help u.