PHP/MySQL with encoding problems

I am having trouble with PHP regarding encoding.

I have a JavaScript/jQuery HTML5 page interact with my PHP script using $.post. However, PHP is facing a weird problem, probably related to encoding.

When I write

htmlentities("í")

I expect PHP to output í. However, instead it outputs í At the beginning, I thought that I was making some mistake with the encodings, however

htmlentities("í")=="í"?"Good":"Fail";

is outputing "Fail", where

htmlentities("í")=="í"?"Good":"Fail";

But htmlentities($search, null, "utf-8") works as expected.

I want to have PHP communicate with a MySQL server, but it has encoding problems too, even if I use utf8_encode. What should I do?

EDIT: On the SQL command, writing

SELECT id,uid,type,value FROM users,profile
WHERE uid=id AND type='name' AND value='XXX';

where XXX contains no í chars, works as expected, but it does not if there is any 'í' char.

SET NAMES 'utf8';
SET CHARACTER SET 'utf8';
SELECT id,uid,type,value FROM users,profile
WHERE uid=id AND type='name' AND value='XXX';

Not only fails for í chars, but it ALSO fails for strings without any 'special' characters. Removing the ' chars from SET NAMES and SET CHARACTER SET doesn't seem to change anything.

I am connecting to the MySQL database using PDO.

EDIT 2: I am using MySQL version 5.1.30 of XAMPP for Linux.

EDIT 3: Running SHOW VARIABLES LIKE '%character%' from PhpMyAdmin outputs

character_set_client    utf8
character_set_connection    utf8
character_set_database  latin1
character_set_filesystem    binary
character_set_results   utf8
character_set_server    latin1
character_set_system    utf8
character_sets_dir  /opt/lampp/share/mysql/charsets/

Running the same query from my PHP script(with print_r) outputs:

Array
(
    [0] => Array
        (
            [Variable_name] => character_set_client
            [0] => character_set_client
            [Value] => latin1
            [1] => latin1
        )

    [1] => Array
        (
            [Variable_name] => character_set_connection
            [0] => character_set_connection
            [Value] => latin1
            [1] => latin1
        )

    [2] => Array
        (
            [Variable_name] => character_set_database
            [0] => character_set_database
            [Value] => latin1
            [1] => latin1
        )

    [3] => Array
        (
            [Variable_name] => character_set_filesystem
            [0] => character_set_filesystem
            [Value] => binary
            [1] => binary
        )

    [4] => Array
        (
            [Variable_name] => character_set_results
            [0] => character_set_results
            [Value] => latin1
            [1] => latin1
        )

    [5] => Array
        (
            [Variable_name] => character_set_server
            [0] => character_set_server
            [Value] => latin1
            [1] => latin1
        )

    [6] => Array
        (
            [Variable_name] => character_set_system
            [0] => character_set_system
            [Value] => utf8
            [1] => utf8
        )

    [7] => Array
        (
            [Variable_name] => character_sets_dir
            [0] => character_sets_dir
            [Value] => /opt/lampp/share/mysql/charsets/
            [1] => /opt/lampp/share/mysql/charsets/
        )

)

Running

SET NAMES 'utf8';
SET CHARACTER SET 'utf8';
SHOW VARIABLES LIKE '%character%'

outputs an empty array.