Client Encoding Mismatch when creating new database
Client Encoding Mismatch is an error message from old versions of the PostgreSQL ODBC driver.

You should go here: http://www.postgresql.org/ftp/odbc/versions/msi/
to get the most recent version and update your system.

Also there are in fact two driver flavors that get installed: ANSI and Unicode. Presumably you need Unicode if you decided to switch to utf-8.