Joomla! 1.5 does not provide an upgrade path from earlier versions. Converting an older site to a Joomla! 1.5 site requires creation of a new empty site using Joomla! 1.5 and then populating the new site with the content from the old site. This migration of content is not a one-to-one process and involves conversions and modifications to the content dump.
There are two ways to perform the migration:
Well... how about never needing to mess with encoding settings again?
Ever needed to display several languages on one page or site and something always came up in Giberish?
With utf-8 (a variant of Unicode) glyphs (character forms) of basically all languages can be displayed with one single encoding setting.