The File | Unicode menu item specifies whether your basic script is a Unicode script or not. If it isn't a Unicode script, then the Basic Script Editor interprets the script as ASCII text.
The Basic Script Editor needs to know the format of your script in order to correctly display and interpret it. Unicode formatting allows the editor to handle more complex characters (such as those displayed in Chinese or Japanese).
Unless you're working in a language that uses multi-byte characters, you generally won't need to select this menu item.