The Phrases section lets you define the automatically generated lines added to message replies, forwarded messages, and quoted text. There are special %-denoted characters that will insert certain values. These are shown at the top of the Phrases section: %D to insert the date, %S to insert the subject, %F to insert the sender, and %% to insert a percent sign. The Indentation field contains the character that will denote quoted text.
The Appearance section lets you control various options for your messages. Automatically Append Signature and Automatically Sign Messages let you toggle whether to automatically include your signature and PGP signature in all of your messages by default. Word Wrap At Column lets you turn word wrapping on and off in the Composer window and lets you set the column at which words will be wrapped.
The When Sending Mail section lets you customize how and when messages are sent.
The Default Sending options lets you define what happens when a message is sent. If send now is selected, the message is sent to the mail server immediately, while if send later is selected, the message is queued in the outbox to be sent later with the File | Send Queued command or automatically when you check your mail, depending on the settings in the Misc tab.
The Send messages options let you select how your message will be encoded when it is sent. Allow 8 bits means that Kmail will send your message in 8 bit ASCII, which means that all special characters such as accented letters will be sent as-is. If MIME-compliant (Quoted-printable) is selected, then special characters will be encoded using standard MIME encodings, which may be more portable to other mailing systems than 8-bit ASCII.