Due to an apparent bug in MySQL: http://bugs.mysql.com/bug.php?id=4541, one of Confluence's tables: os_propertyentry, cannot be created when "Confluence+MySQL is configured for foreign character sets or UTF-8": failing with the following error:

create table OS_PROPERTYENTRY (entity_name VARCHAR(125) not null, entity_id BIGINT not null, entity_
key VARCHAR(255) not null, key_type INTEGER, boolean_val BIT, double_val DOUBLE PRECISION, string_va
l VARCHAR(255), long_val BIGINT, int_val INTEGER, date_val DATETIME, primary key (entity_name, entit
y_id, entity_key))
Nov 10, 2004 7:58:30 PM net.sf.hibernate.tool.hbm2ddl.SchemaUpdate execute
SEVERE: Unsuccessful: create table OS_PROPERTYENTRY (entity_name VARCHAR(125) not null, entity_id BI
GINT not null, entity_key VARCHAR(255) not null, key_type INTEGER, boolean_val BIT, double_val DOUBL
E PRECISION, string_val VARCHAR(255), long_val BIGINT, int_val INTEGER, date_val DATETIME, primary k
ey (entity_name, entity_id, entity_key))
Nov 10, 2004 7:58:30 PM net.sf.hibernate.tool.hbm2ddl.SchemaUpdate execute
SEVERE: Syntax error or access violation message from server: "Specified key was too long; max key l
ength is 1024 bytes"

or in summary:

"Specified key was too long; max key length is 1024 bytes"

Because a UTF-8 character is stored as three bytes in MySQL the maximum key length can only be 1024/3 characters long. The compound key in the os_propertyentry table seems to be violating this constraint.