mm-util.el contains the following function:

    (defun mm-find-mime-charset-region (b e &optional hack-charsets)
      "Return the MIME charsets needed to encode the region between B and E.
    Nil means ASCII, a single-element list represents an appropriate MIME
    charset, and a longer list means no appropriate charset."
      (let (charsets)
        ;; The return possibilities of this function are a mess...
        (or (and (mm-multibyte-p)
                 (fboundp 'find-coding-systems-region)
                 ;; Find the mime-charset of the most preferred coding
                 ;; system that has one.
                 (let ((systems (find-coding-systems-region b e)))
                   ;; Fixme: The `mime-charset' (`x-ctext') of `compound-text'
                   ;; is not in the IANA list.
                   (setq systems (delq 'compound-text systems))
                   (unless (equal systems '(undecided))
                     (while systems
                       (let ((cs (coding-system-get (pop systems) 'mime-charset)))
                         (if cs
                             (setq systems nil
                                   charsets (list cs))))))
                   charsets))
            ;; Otherwise we're not multibyte, XEmacs or a single coding
            ;; system won't cover it.
            (setq charsets 
                  (mm-delete-duplicates
                   (mapcar 'mm-mime-charset
                           (delq 'ascii
                                 (mm-find-charset-region b e))))))
        (if (and (memq 'iso-8859-15 charsets)
                 (memq 'iso-8859-15 hack-charsets)
                 (save-excursion (mm-iso-8859-x-to-15-region b e)))
            (mapcar (lambda (x) (setq charsets (delq (car x) charsets)))
                    mm-iso-8859-15-compatible))
        (if (and (memq 'iso-2022-jp-2 charsets)
                 (memq 'iso-2022-jp-2 hack-charsets))
            (setq charsets (delq 'iso-2022-jp charsets)))
        charsets))

How do do something like 'find-coding-systems-region' with XEmacs?  As
XEmacs doesn't have this function, only the second part of the 'or' is
used with XEmacs. The result is that UTF-8 is never used, although
XEmacs works fine with UTF-8 together with Mule-UCS (I add a German
umlaut here to force this message to use UTF-8: 'ö').

I applied the following small patch to mm-util.el to make it possible
to use UTF-8 in outgoing mail with XEmacs and Mule-UCS