FormatType is an option for output streams, graphics and functions such as Text which specifies the default format type to use when outputting expressions.
Standard values for FormatType are given in the notes for Format.
SetOptions[stream, FormatType -> type] resets the format type for an open stream.
For graphics functions the default option setting is FormatType :> $FormatType.
For graphics functions box-based format types such as StandardForm and TraditionalForm can be used only when a notebook front end is present.
See The Mathematica Book: Section 2.9.15 and Section 2.11.3.
See also: TextStyle, LanguageCategory.