Encoding
(If you don't know about character encodings and Unicode, please read my article on the subject first.)  
 
As stated at the start of the article, strings are always in Unicode encoding. The idea of "a Big-5 string" or "a string in UTF-8 encoding" is a mistake (as far as .NET is concerned) and usually indicates a lack of understanding of either encodings or the way .NET handles strings. It's very important to understand this - treating a string as if it represented some valid text in a non-Unicode encoding is almost always a mistake.  
 
Now, the Unicode coded character set (one of the flaws of Unicode is that the one term is used for various things, including a coded character set and a character encoding scheme) contains more than 65536 characters. This means that a single char (System.Char) cannot cover every character. This leads to the use of surrogates where characters above U+FFFF are represented in strings as two characters. Essentially, string uses the UTF-16 character encoding form. Most developers may well not need to know much about this, but it's worth at least being aware of it.