Case insensitive search and NOT ignoring umlauts in comparison both work with utf8_swedish_ci:
mysql> CREATE TABLE users (
id INT(11) default NULL auto_increment,
name varchar(60) NOT NULL,
PRIMARY KEY (id),
UNIQUE KEY name(name)
) ENGINE=InnoDB DEFAULT CHARSET=utf8 COLLATE utf8_swedish_ci;
Query OK, 0 rows affected (0.13 sec)
mysql> INSERT INTO `users` (`name`) VALUES ('Hello'), ('hällö');
Query OK, 2 rows affected (0.10 sec)
Records: 2 Duplicates: 0 Warnings: 0
mysql> SELECT * FROM users WHERE name='hello';
+----+-------+
| id | name |
+----+-------+
| 1 | Hello |
+----+-------+
1 row in set (0.00 sec)
mysql> SELECT * FROM users WHERE name='hallo';
Empty set (0.00 sec)