This option is available only in the WIT international version (Unicode enabled), for Windows NT4, Windows 2000, Windows XP, Vista and 7.

It defines the default character set for all new documents (it is possible, for a given document, to change its own character set after creation).

You may :

 display all languages scripts, including right to left scripts such as Arabic or Hebrew,

 specify how Web browsers should interpret character codes in generate web pages.

For example, to write with Russian scripts :

 Configure the keyboard for Cyrillic characters,
 Choose the "Cyrillic (KOI8-R)" or "Cyrillic (KOI8-U)" character set.

The UNICODE coding is the default value, suitable for most languages : keep it if possible.

Trick :
Users of Western Europe, USA, Canada, Australia, New Zealand, English or French speaking, etc... KEEP the "Western Europe" character set (iso-8859-1). HTML pages will be generated with 8 bit instead of 16 bit characters, and will be twice lighter (in size) than in other encodings.