Networks email encoding - which to use?

Just received a message (from the addressee here in the UK) that an email I sent him was illegible. Checking, my encoding was Western European ISO. Nobody else has had problems reading my sends AFAIK apart from some guy in Saudi Arabia who said he used UTF-8 (and I could read his sends OK.)

But what's the "best" setting? And what's the default in XP/OE?