The encoding issues have been fixed for the next build - it will now attempt to convert both text AND titles. It's possible some conversions will still be incorrect, but more common ones like UTF-8 -> ISO-8859-1 should be handled correctly. It attempts to determine the existing encoding by analyzing the input string, and converts these to the detected encoding used by vBulletin - so make sure you are importing while viewing the AdminCP with the same language you want the imported wiki pages in.
The previous implementation used iconv, which did not work if the locale was set incorrectly, or if MediaWiki did not flag its data as UTF-8. Either way, more character set combinations should now be supported.
For further issues with the importer, please open a new report.