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Can someone explaing me about encoding and its importance. I understand that we have various encodings and in each of them first 127 characters are same.
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Character encoding tells computers how to interpret digital data into letters, numbers and symbols. This is done by assigning a specific numeric value to a letter, number or symbol. There are a number of character encoding sets in use today, but the most common formats in use on the World Wide Web are ASCII, UTF-8 and Unicode.
The simple answer is that computers don’t see data as we, humans do. They see it in binary, which is a system formed from zeros and ones. So, encoding information helps computers “translate” data from text, images, videos, etc, into zeros and ones they can read and understand.
Encoding is needed for language. Consider the word “pipe.” The concept of a pipe is communicated via the English language writing system via the 4-letter sequence offset by whitespace or punctuation, effecting a textual encoding. This concept may be encoded via audible modulation of sound waves by speaking the word “pipe.”
The foremost significance of encoding a signal/message is to reduce the transmission cost involved. The two basic characteristics of any communication system are Bandwidth and Power. In order to improve the quality of transmission keeping the bandwidth and power requirements low, we encode the signal.
Read Joel Spolsky's excellent article on the subject.
An interesting point that was noted in the discussion of another answer (which I didn't really think the author needed to delete) is that there is a difference between a character set, which (in the other author's words - don't remember his username) defines a mapping between integers and characters (e.g. "Capital A is 65"), and an encoding, which defines how those integers are to be represented in a byte stream. Most old character sets, such as ASCII, have only one very simple encoding: each integer becomes exactly one byte. The Unicode character set, on the other hand, has many different encodings, none of which are equally simple: UTF-8, UTF-16, UTF-32...
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