Error on install "Specified key was too long; max key length is 1000 bytes"

From what I can tell, because innoDB supports a maximum of 1000 bytes for a key and because the attached SQL statement is set to use UTF-8, the key exceeds 1000 bytes. This causes a large error dump when trying to install CiviCRM on our server and prevents it from successfully installing. (Version below)

The code at fault is between lines 2616 and 2551 of the civicrm.mysql install file. I've attached the error and the code at fault below. I was able to patch this issue by changing the default character set to latin1 and allowing it to use the default collation setting. Will this alteration cause any future issues with our install?

Apache version 2.2.23
PHP version 5.3.18
MySQL version 5.1.65-cll