My setup is:
linux + Ruby 1.9 + rails 2.3.8 + mongodb + mongo_mapper
I followed http://railscasts.com/episodes/194-mongodb-and-mongomapper, that everything is OK
I had this error with a Rack application.
Adding
Encoding.default_external = Encoding::UTF_8 Encoding.default_internal = Encoding::UTF_8
to config.ru resolved it for me.
config.ru