utf8_general_ci is a very simple — and on Unicode, very broken — collation, one that gives incorrect results on general Unicode text.  What it does is:
- converts to Unicode normalization form D for canonical decomposition
- removes any combining characters  
- converts  to upper case 
This does not work correctly on Unicode, because it does not understand Unicode casing. Unicode casing alone is much more complicated than an ASCII-minded approach can handle. For example:
- The lowercase of “ẞ” is “ß”, but the uppercase of “ß” is “SS”. 
- There are two lowercase Greek sigmas, but only one uppercase one; consider “Σίσυφος”.
- Letters like “ø” do not decompose to an “o” plus a diacritic, meaning that it won’t correctly sort.
There are many other subtleties.
- utf8_unicode_ciuses the standard Unicode Collation Algorithm, supports so called expansions and ligatures, for example: 
German letter ß (U+00DF LETTER SHARP S) is sorted near "ss" 
Letter Œ (U+0152 LATIN CAPITAL LIGATURE OE) is sorted near "OE".
utf8_general_ci does not support expansions/ligatures, it sorts 
all these letters as single characters, and sometimes in a wrong order. 
- utf8_unicode_ciis generally more accurate for all scripts. 
For example, on Cyrillic block:- utf8_unicode_ciis fine for all these languages: 
Russian, Bulgarian, Belarusian, Macedonian, Serbian, and Ukrainian. 
While utf8_general_ci is fine only for Russian and Bulgarian subset of Cyrillic. 
Extra letters used in Belarusian, Macedonian, Serbian, and Ukrainian 
are sorted not well.
The cost of utf8_unicode_ci is that it is a little bit 
slower than utf8_general_ci. But that’s the price you pay for correctness. Either you can have a fast answer that’s wrong, or a very slightly slower answer that’s right. Your choice.
 It is very difficult to ever justify giving wrong answers, so it’s best to assume that utf8_general_ci doesn’t exist and to always use utf8_unicode_ci. Well, unless you want wrong answers.
Source: http://forums.mysql.com/read.php?103,187048,188748#msg-188748