Thank you Rick, I'm impressed about the humongous volume of your knowledge far beyond MySQL. Here are the answers to your questions and more.
Approach 1: I first prepared the file with Eclipse under Windows 7. Then I tried again with Notepad and TexMakerX because I wanted to try saving the file as utf8 and I didn't find this feature in Eclipse (I'm completely new to it too). With Notepad and TexMakerX I tried to save the file as ANSI and as UTF8. More about this later. I make SQL files with those tools, which all get interpreted correctly with all settings when I do "source c:...", but again, there are no non-english characters in SQL. I'm also entering the commands and viewing the results from cmd (MySQL).
Approach 2:
Using the following setting:
character_set_database utf8
character_set_filesystem binary (again, I'm assuming it's not a good idea to change this, right?)
character_set_server utf8
character_set_system utf8
These settings I didn't change.
2.1: Using NAMES at cp850, the first column outputs 'ß' and the second E1.
2.2: With set NAMES latin1, idem as before ('ß' and E1).
2.3: With set NAMES utf8, idem as before.
2.4: With NAMES utf8, I did SELECT _cp850'ß', hex(_cp850'ß'); and I got a srange character as first (which I can't reproduce here) and E1.
2.5: With NAMES latin1, I did SELECT _cp850'ß', hex(_cp850'ß'); and I got a srange character as first (which I can't reproduce here, but different from that before) and E1.
2.6: With NAMES cp850, I did SELECT _cp850'ß', hex(_cp850'ß'); and I got 'ß' as first and E1.
2.7: With names cp850, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using utf8)); and I got 'ß' and C39F.
2.8: With names cp850, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using latin1)); and I got 'ß' and DF.
2.9: With names cp850, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using cp850)); and I got 'ß' and E1.
2.10: With names latin1, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using utf8)); and I got the strange character as 2.5 above and C39F.
2.11: With names latin1, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using latin1)); and I got the strange character as 2.5 above and DF.
2.12: With names latin1, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using cp850)); and I got the strange character as 2.5 above and E1.
2.13: With names utf8, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using utf8)); and I got the same strange character as point 2.4 and C39F.
2.14: With names utf8, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using latin1)); and I got the same strange character as point 2.4 and DF.
2.15: With names utf8, I did SELECT _cp850'ß', hex(convert(_cp850'ß' using cp850)); and I got the same strange character as point 2.4 and E1.
If this is not confusing enough (it is already hell for me, but I'm sure it takes a lot more to confuse you), I did additional testing on the importing of files of my first post.
The only setting among the many I have tried that seems to store the correct utf8 code of the characters (according to this site:
http://www.utf8-zeichentabelle.de/) and to show it right on console, is
character_set_client latin1
character_set_connection latin1
character_set_results cp850
and only with the files saved as ANSI (utf8 also didn't work).
Now I'm all happy because I created a .csv file with the names of all the countries of the world in German, imported it and it is now stored and showing up properly, although damn me if I understand why.
The problem I'm getting now is when I want to query for a country whose german name starts with 'Ä'. If I do a select ... where name_de like 'Ä%' I get also those that starts with regular 'A' and the only one that starts with the A with the circle on top (which is not a german letter and I don't know why it was in the list of the official german names, but I imported it anyway). Well, I believe it would be appropriate to start a new thread with this problem (but obviously, if you have any hint here, it would be appreciated).
Thank you very much.