It seems a character set and/or collation issue to me. This "garbled characters" issue can happen, for example, when your database is in UTF-8, database connection character set and client charset is UTF-8, but database tables and/or table data have a different charset (ISO-8859-1 for example). Incompatible PHP charsets and page encodings don't help either. As you can see, there are quite a few variables that affect how data will be displayed.
1. As a first step towards solving this problem, go to phpMyAdmin and click on "Show MySQL system variables":
Check charset and collation settings. Here's an example:
2. Did you select UTF-8 during SMF installation?
3. Select the database where SMF tables are installed and note what collation is used for each table:
Click on a table and see what collation is specified for each varchar, tinytext and text field:
4. Check the contents of phpinfo(), or at least the values for:
- default_charset (in the PHP Core section)
- HTTP_ACCEPT_CHARSET (in Apache Environment)
- Accept-Charset (HTTP Headers Information)
- _SERVER["HTTP_ACCEPT_CHARSET"] (PHP Variables)
Post your above settings here and I'll try to help you.