Fixed that:

SELECT * FROM t WHERE (c COLLATE latin1) >'a'
might fail in some cases

sql/item_strfunc.cc

@@ -1943,7 +1943,8 @@ void Item_func_conv_charset3::fix_length_and_dec()
 String *Item_func_set_collation::val_str(String *str)
 {
   str=args[0]->val_str(str);
-  null_value=args[0]->null_value;
+  if ((null_value=args[0]->null_value))
+    return 0;
   str->set_charset(set_collation);
   return str;
 }
@@ -1961,8 +1962,10 @@ bool Item_func_set_collation::fix_fields(THD *thd,struct st_table_list *tables,
     return 1;
   maybe_null=args[0]->maybe_null;
   binary=args[0]->binary;
-  const_item_cache=args[0]->const_item();
   str_value.set_charset(set_collation);
+  with_sum_func= with_sum_func || args[0]->with_sum_func;
+  used_tables_cache=args[0]->used_tables();
+  const_item_cache=args[0]->const_item();
   fix_length_and_dec();
   return 0;
 }
@@ -1987,7 +1990,6 @@ bool Item_func_set_collation::eq(const Item *item, bool binary_cmp) const
   return 1;
 }
 
-
 String *Item_func_charset::val_str(String *str)
 {
   String *res = args[0]->val_str(str);

sql/item_strfunc.h

@@ -504,10 +504,7 @@ class Item_func_set_collation :public Item_str_func
   bool fix_fields(THD *thd,struct st_table_list *tables, Item **ref);
   String *val_str(String *);
   void fix_length_and_dec() 
-  {
-    max_length = args[0]->max_length; 
-    str_value.set_charset(set_collation);
-  }
+  { max_length = args[0]->max_length; }
   bool eq(const Item *item, bool binary_cmp) const;
   const char *func_name() const { return "set_collation"; }
 };