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After A LOT of searching around, I finally found the answer and I'll post it so that anybody encountering the same situation doesn't have to go through the same ordeal as me.
It seams that trough a problem of some sort (probably centered in the php version used), the encoding and setnames function where not in sinc. The following should be a standard hack on future XOOPS versions if they want to claim that it is pure UTF-8 for it will force most systems to the UTF-8 encoding (my provider didn't let me access the php settings). The first thing, of course is to make sure the global.php file in your languages folder points to UTF-8 and not another encoding. It should be done for all your languages and you'll find that encoding near the end of the file.
Then, go to your Xoops/class/database/ folder and edit the file: mysqldatabase.php
In the "connect" function, right before the "return true" part, insert those 3 lines.
mysql_query('SET character_set_results="utf8"');
mysql_query("SET CHARACTER SET utf8");
mysql_query("SET NAMES 'utf8'");
Your all set to go.
Try all the languages in the world that you want and then go see in your database with mysqladmin and you'll see that no weird characters are there.
On a fresh installation, people may think that their XOOPS is trully UTF-8 since all the characters display fine but if you take a look at the database itself, you may notice that the encoding is wrongly passed. I noticed it because I had text from a previous installation that was
right in the database, hence displayed wrongly in the browser. This will cause big headackes when you upgrade your database or just want to edit stuff directly into it. Friendly warning.