I have a system running Linux (defaults to utf-8) running Joomla 1.0.15 (using iso-8859-1).
Everything worked fine with CommunityBuilder 1.2, but as a preparation for upgrading to Joomla 1.5.x, I upgraded to CommunityBuilder 1.3.1 (and later to 1.4, same problem)

What is happening is that when changing text in the cb_aboutme (a Editor Text Area), the system end up saving utf-8-encoded text into the iso-8859-1 field (and 'ø' is stored as 'ø').

Joomla 1.0.15 uses an old version of TinyMCE WYSIWYG editor, but I think the problem is that CommunityBuilder uses wrong encoding when getting text from the editor. If I modify the profile settings to use No WYSIWYG Editor, text is stored as correct iso-8859-1, but most of my users are not able to handle HTML themselves.

I have a separate test-environment where I can debug. If anyone can point me to the point where CommunityBuilder get text from the WYSIWYG editor, or even better, knows how to fix this issue, I would be very happy..

I have now disabled all but CB Core and CB Menu plugins, uninstalled the Norwegian language file, and the problem still exists..

I still don't know where the utf-8 text comes from, it might just as well be a problem with the TinyMCE editor, which is why I'm asking for a relevant place to insert a javascript alert for debugging purposes. (I have added alerts quite a few places now, all of them returning the wrong text, which is why I want to check the value immediately after it is returned from TinyMCE)

It isn't easy to find editors for Joomla 1.0.x anymore, but I installed latest version (at time of writing, 2.6.4.1) of the 2.6.x Series JoomlaFCK editor , and it works great!
Don't know why I didn't see this problem in the old CommunityBuilder version, but for me - problem solved.