BuddyPress.org

@Justme1-

If you do not have that line in your wp-config file, it means you used an older version. I just checked a new WPMU 2.7.1 download and the wp-config-sample.php file has this additional line in it.

Anyway, this line goes in the section that starts with this comment:

/** The Database Collate type. Don’t change this if in doubt. */

As far as your last question, yes. You will have lots of issues using the BuddyPress themes until BuddyPress is successfully activated.