Unicode is an extended character encoding which allows representation of a huge range of character sets. The standard ASCII character codes are a small subset of the characters included in the unicode set which also include, inter alia, Japanese and Chinese characters.
Under QT/Embedded, unicode characters are 16 bit numbers which can be encoded raw. On some systems (eg Windows) the two bytes required to make a 16-bit number are stored in one order (little-endian) and on others (eg Mac) in another order (big-endian). These two encodings are called UCS-2(LE) and UCS-2(BE), respectively.
There is another method used to encode 16 bit numbers for unicode which is proving popular under Linux because it allows documents which only contain ASCII to remain unaltered. Special codes are used to identify when more than one byte is required to encode a character. This encoding is called UTF-8.
OpieReader provides two further encodings (in addition to just plain ASCII - actually the local 8-bit encoding for the device). One is the same as that used on Palm devices (but not J-OS) which is very similar to that which is used on most Western installations of Windows (which is the other encoding).
In order to see all those extra characters you will need to install a font with those characters in. The two main ones I know of for QT/Embedded are unifont and cyberbit. These are needed even for some of the Palm or Windows characters - those outside the normal 7-bit ASCII range.
A further issue when dealing with languages which don't use spaces to delineate words is how to do line-breaking. Actually, these languages are easier to deal with than space delineated languages but I was brought up on a space delineated language so I think back to front on this issue. For these languages each character is treated as a word with line breaks possible after every character.
Here is a warning for when you want to play about with encodings. If you don't know which encoding a document is in, or you just want to see what a document looks like in the wrong encoding (why not, I do it all the time 8^)) choose Ideogram spacing first. Otherwise OpieReader can spend a long time looking for the next space. You can always swap back when you are sure that it is appropriate.