Rake db:test:prepare causes error

Rails
1

I am a newbie to RoR and I’m having trouble getting testing up and
running. I tried Googling my problem and haven’t found an answer that
has worked. When I run rake db:test:prepare, I get the following error
(I’m working with the RailsSpace book):

Macintosh:rails_space myusername$ rake db:test:prepare
(in /Users/myusername/Documents/rails_projects/rails_space)
rake aborted!
Mysql::Error: You have an error in your SQL syntax. Check the manual
that corresponds to your MySQL server version for the right syntax to
use near 'DEFAULT CHARACTER SET utf8’ at line 1: CREATE DATABASE
rails_space_test DEFAULT CHARACTER SET utf8

I can post the full trace here if that would help. I am using Rails
2.0.2 with MySQL 4.0.21 on Mac OS 10.5.1. Thanks,

Jamie F.