MySQLi 
MySQLi is an improved database layer for PHP 5 and MySQL 4.1+. It is strongly recommended that MySQLi be used if your MySQL server is at version 4.1 or higher.

To enable MySQLi, view Editing the vBulletin Configuration File.

config.php contains two advanced settings that you may need when MySQLi is in use. These settings are to be ignored as long as you are not having issues of the following type:
MySQL Error  : Illegal mix of collations (latin1_swedish_ci,COERCIBLE) and (utf8_general_ci,IMPLICIT) for operation
Generally, this error only happens when your database's character set has been changed from the default of latin1. To begin to resolve this problem, you must first determine what character set is being used for your database.

From the Administrator Control Panel, go to Admin CP->Maintenance->Execute SQL Query. If you receive a no permissions message, please refer back to Editing the vBulletin Configuration File on how to grant the appropriate permissions so that you may execute queries.

Enter the following query in the Manual Query input box and press [Continue]

SHOW VARIABLES LIKE 'char%'

The results screen will show your current character set settings:

If the values character_set_database and character_set_connection are different then this can be resolved by continuing this solution.
Note:
If the values are the same, then your problem will not be solved by this solution. Please contact vBulletin Support in this case. You may have tables in your database that are configured to use a different character set than your database is. All of your tables will need to be updated to use the same character set. This condition can be caused by changing the character set of your database after vBulletin has been installed. Upgrades may create tables that are in your new character set, which will cause problems.
Your character_set_connection needs to be updated to be the same as your character_set_database.

Create a new file in your forums include directory named mysqli.ini. Inside of this file place:
[client]
default-character-set=utf8
The value utf8 will need to be the same value that appeared as your character_set_database in the previous step. Generally, this will be utf8 but you may have a special case that requires a different setting.

Edit the vBulletin Configuration File file by following the instructions in the previous section.

Uncomment the following line by removing the two slashes from the beginning
//    $config['Mysqli']['ini_file'] = 'c:\program files\MySQL\MySQL Server 4.1\my.ini';
Change the line to point to the location of the mysqli.ini file that you created in the previous step. Example:
$config['Mysqli']['ini_file'] = 'c:\program files\apache group\apache\htdocs\forums\includes\mysqli.ini';
If you have enabled MySQLi and entered the correct path to your new mysqli.ini file, then this problem should be resolved.
Colin Frei 07th Mar 2006, 11:39am
It isn't all too clear, but you'll need PHP5 to use MySQLi as well, as support for it was only added in PHP5.
voter 04th Apr 2010, 03:24pm
If decide to use utf8 for non English characters, define later in Admincp->Languages & Phrases->Language Manager->(For All Languages) HTML Character Set as UTF-8 otherwise messages with non-englisch characters entered in Forms, will be stored in Database as HTML Entities and not as unicode characters.