$CharacterEncoding specifies the default raw character encoding to use for input and output functions.
The default setting for $CharacterEncoding is $SystemCharacterEncoding.
The setting $CharacterEncoding = None takes all special characters to be represented externally by printable ASCII sequences such as \[Name] and \:xxxx.
Possible other settings are:
With $CharacterEncoding = "encoding" characters that are included in the encoding can be input in their raw 8- or 16-bit form, and will be output in this form.
Unencoded characters can be input and will be output in standard \[Name] or \:xxxx form.
When using a text-based interface, resetting the value of $CharacterEncoding has an immediate effect on standard input and output in a Mathematica session.
When using the notebook front end, raw character encodings are normally handled automatically based on the fonts you use. Only raw 16-bit Unicode is ever sent through the MathLink connection to the kernel.
$CharacterEncoding can be set to a list of the form class, , "", , "", ... . The class defines the general form of encoding; the give character codes for specific characters . Possible settings for class include:
$CharacterEncoding affects the input and output of all characters, including those in symbol names and comments.
$CharacterEncoding also affects characters that appear in Text graphics primitives.
See The Mathematica Book: Section 2.7.8.
See also: CharacterEncoding, FromCharacterCode, ToCharacterCode, $SystemCharacterEncoding, $ByteOrdering.