Here is what I found when searching for information on this:
Confluence recommendation best described here: https://jira.atlassian.com/browse/CONF-14213
This page doesn't mention it so I assume it is default, case insensitive: http://confluence.atlassian.com/display/JIRA/Connecting+JIRA+to+MySQL
You should always configure your MySQL database to be case-sensitive to avoid problems where MySQL treats similar entries as duplicates. However, I see that the latest version of the documents have now been updated to include an entry regarding case sensitive collation.
All the best,
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