You can use the Advanced pane of the Terminal preferences to choose terminal emulation settings and character encoding.
Settings list
To modify a setting, select it from the list, and then select from the options in the Settings preference pane.
To create a new setting, click the Add (+) button.
To delete a setting, select it in the Settings list, and then click the Delete (-) button.
To duplicate a setting, select it in the Settings list, and then choose Action menu > Duplicate Settings.
To restore a setting to the standard default configuration, select it in the Settings list, and then choose Action menu > Restore Defaults.
To use a setting created on another computer, choose Action menu > Import, and then select the Terminal settings file from the dialog.
To export a setting, choose Action menu > Export, and then select the location where you want to save the file.
Emulation
Use the options available in the Emulation section to change the terminal emulation behavior.
To change the type of terminal, choose a terminal from the “Declare terminal as” pop-up menu.
Select additional terminal behaviors from the checkboxes.
Bell
To have the terminal alert you with a sound, select the “Audible bell’ checkbox.
To have the terminal alert you with a flash, select the “Visual bell’ checkbox.
International
To change the character encoding, choose a type of encoding from the “Character encoding” pop-up menu.
To configure the environment for this encoding, select “Set LANG environment variable on startup.”