Kim,
I would suggest to start with a few test records, and see what you get. They are in Korean, I suppose? I don’t see why this should be much of an issue, if both your EE setup as such and your template are using utf-8 the db collation should not matter much.
If you need assistance with the import, my suggestion would be to start a new thread in Howto, and provide a bit of sample data, like a small .csv file.
If I decide to proceed with latin1 database as you recommend here
I recommend to stay with the default setup, yes.
my concern going forward is will I able to convert latin1 database to utf8 database with all Korean characters intact once I decide to move to EE2 when it’s released. How will this be achieved?
Yes, the update script will convert your db to utf-8. Unlike with EE 1.6.7, however, EE 2.0 will use native utf-8 conncetions, so no hacks are required (which, you are correct, we regularly discourage).