There are a couple of reasons for this problem

Using UTF-8 characters in a non-UTF-8 forum

If your users are using UTF-8 characters, perhaps copied in from some editing program, but you did not use UTF-8 when you set up the forum, these UTF-8 characters (special characters like £) will not show up properly in your forum.

There are two solutions -- either remove the "special" UTF-8 characters from the post, or convert your forum to UTF-8.

Using non-standard characters in an SMF forum

Some word processing programs replace standard characters with non-standard characters. These non-standard characters cannot be represented properly by your forum, whether you use Latin-1 or UTF-8. The only solution is to edit the post, and replace the non-standard characters with standard characters compatable with your forum.

MS Word "smart quotes"

MS Word is an example of a word processor using non-standard characters. Microsoft calls them "Smart Quotes". The character encoding is Windows-1252 or CP-1252, and uses ISO-8859-1 reserved control codes in positions x80 through x95 to represent some specialty characters (typographically proper quotes, dashes, euro sign, etc.). These characters are not compatable with ISO-8859 or UTF-8 character encodings, and should not be used in SMF forums, which do not support Windows-1252 characters. To avoid the problem, users may disable "smart quotes" in Word, and manually remove the non-standard characters wherever they appear on the forum.