MySQL 5 has indeed dumped support for the format, but it's the way Debian currently does things that causes problems. The root cause is a version requirement on libreadline4 (required by mysql-*-4.1) in the readline-common package (part of libreadline5) which can't be satisfied by anything but unstable/kfreebsd-i386. And the source is missing, so it can't even be recompiled.

What triggered it for me was a rebuild following a harddrive crash. Starting off with a clean Sarge install and adding Eclipse and KDE 3.5 from testing leaves no other option but to install MySQL 5.0. The backup of the mysql directory contained some little used development databases dating back to MySQL 3.x that still had ISAM tables so the 5.0 installation aborted. In the end, I had to back out all the stuff installed from testing to get MySQL 4.1 back on so I could convert the tables.

(But before the crash, MySQL 4.x happily coexisted with Eclipse so something must have moved recently on the readline-common packages as well)