This means that your original Moodle has been below version 1.6 where the Unicode conversion occurs. This conversion cannot be done by Fantastico and the automatic upgrade fails.
In such cases we recommend:
1. Restore your Moodle from Fantastico's backup following these instructions;
2. Upgrade your Moodle manually following its manual.
If you have any troubles with the above we can help you through our development services.
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