Newer release of mysqldump uses UTF8 as its default charset if nothing is specified, while older versions (older than 4.1 typically) use Latin1 as default characterset.
If your database charset is Latin1 and dump in UTF8 collation, the data may ends up become simply rubbish, garbled, or unreadable.
In the other hand, if you database charset is already in UTF8, when you run mysqldump from a Linux shell, you may still get garbled data. If this happens to you, check your shell's locale
% locale
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