It's possible mongrel is not including the charset in the HTTP header while WEBrick is. In my testing both show unicode chars fine, so you might want to embed a charset as a meta tag in your app:
<meta http-equiv="Content-Type" content="text/html; charset=utf-8" />
This'll force whatever browser to use utf-8 regardless of what's in the header.
On the client side, that should be enough. All the browsers I've tested are good about sending data as utf-8.
On the Rails/database side, you'll need to make sure your database is storing stuff as utf-8. There are a number of resources out there that detail what needs to be done. This link [1] is good if you're on MySQL.
[1] http://ruphus.com/blog/2005/06/23/getting-unicode-mysql-and-rails-to-cooperate/