Just use Unicode and don't even think about backward compability, because thouse who need it most probably still are with PHP4 and MySQL 3.x Most normal developers are for years with utf-8 for now and even wouldn't notice it.
So +1 for pure Unicode. No switches. Lame hosting companies 100% will mess up with this switch and will ruin everything again like it was with PHP5. Make them pay for PHP5! ;) :D
