Importing products via Feeds csv import is generating error: "General error: 1366 Incorrect string value:"
Maybe the csv is encoded in UTF8, but everything else needs to be UTF8: UTF8 all the way through

I don't know exactly in what step is failing, did you check the databases and tables collation?
Drupal has by default the "SET NAMES="utf8", http://drupal.org/node/310447

Hopefully the Feeds maintainers have a look to your case here. http://drupal.org/node/1140194 , it seems you are not alone.