>> Your application uses UTF8 connection charset, while ISQL does not,
>> right ?
>
> (I'm impressed that you remember!)

...

> I noticed some traffic about UTF8 as a connection character set a
> while back, so is this a known problem? And if so:

I do not remember, neither I heard about such problem,
I just tried and got the same error :)

> - Is it in the client or the server?

Server.

> - Has it been fixed in 2.0.1?

No. (have not tried 2.1)

I think you should report a bug.

Ivan