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Historically, the default for HTML was iso-8859-1, so that's what you're supposed to use when you don't specify anything. I'm not sure about HTML 4.01, but I think a well formed and conforming XHTML page must contain a content-type/charset header (unless the information is provided in the http headers by the server).
Why does it matter? If you don't specify anything, but write your texts on Windows, then you're likely to end up with special characters that are encoded in the wrong character set. The most common example are double quotes encoded in Windows-1252, which will look strangely in a standards conforming browser that tries to display the page as iso-8859-1 (question marks on Linux, empty boxes on a Mac).
As you might guess by now, IE will display pages very nicely that are incorrectly encoded in this way. You'd be surprised how many high profile sites don't get this right. Of course, once you start to use languages that include non-ascii characters, things get even funnier...;)
does displying the character set in the head even matter?bird summed it up very nicely...I just wanted to add an amen. ;)
There are quite a few people out there on the net that don't have English set as their default language. Without a charset in the <head>, you'd be surprised what shows up. I surf a lot between Japanese, Chinese and English, and can't tell you what a pain it is to have to manually set the encoding for each page I visit on some sites. All this hassle could have been avoided if the person who made the page had simply included that charset info...
I don't know if this is really the case, I'm just making an educated guess here. But since the original default is iso-8859-1, it could well be that the rendering engine in your browser is optimized for that. This would mean that a page encoded in a different character set would have to get munged internally into something more easily digestable for the rendering engine. This shouldn't take more than split seconds (if it really happens), but could still be noticeable under certain circumstances.
But then, small speed differences can be caused by any other thing that does or doesn't happen on your machine, especially under Windows. And human perception is very easy to fool as well. Things may look faster to you eg. when you're tired, because you aren't prepared to follow them in the same way as you would be after the third cup of coffee in the morning...;)
The modem or other means of net access will have to retrieve a set amount of data on a page, i.e. so many 1's and 0's
Its the browsers job to interpret it so I assume a difference in speed may come down to how many windows you have open etc, or if your browser has a certain "char set" more readily accessible, thus the faster speed. I guess these boring comp architecture classes I sit through give me an inkling of what REALLY goes on with computers :)
I agree about the perception bit, but this was notably faster. The site is an entertainment industry directory I operate and check frequently. If fact, when I noticed it after I changed the charset, the modem transfer speed displayed on my computer was about 3000 bytes slower than usually. That's another reason I thought the charset made a difference.