Unknown system variable \'NAMES\'(Error: : 1193)

[Guest]

I've managed to get to step 3 when installing, everything is now ticked off as ok and i've verrified the database ok.
When i click next i get:

Error while inserting data into the database:
'SET NAMES \'utf8\''
Unknown system variable \'NAMES\'(Error: : 1193)

Im using Eclipse Internet hosting, which is using MySQL 4.0

does anyone have any suggestions on how to fix this problem?