>CODEPAGE = AUTO in your config.fpw just tells Fox to use this translation ability. If you create or copy a table it will automatically assign the codepage to 1252 and convert the data to the correct character set (in the case of COPY TO). Without it you'll get a lot of junk looking characters when you're looking at dos (437) data in windows.
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Additional note: CODEPAGE = AUTO will use the system settings, i.e. what it finds in registry (in DOS days it looked at Codepage Select command in the autoexec.bat). Assigning a specific codepage, like CODEPAGE = 1251 will force VFP to use that as its default codepage, regardless of the system settings. This was introduced back at the times when DOS 6.x was gradually replacing DOS 5, and there were many third-party vendors for solving codepage problems (because M$ solution was eating up too much lower memory of the old 386 systems) which Fox couldn't detect. This still exists, meaning you can still have several different configs, each for a different codepage, and have fox behave differently without any need to change system settings (which would take you all day under W9x and require a reinstall of it).