Second Step

Here's a slightly more complex example:

• \enableregime	[utf-8]		% choose input encoding
  				% (in LuaTeX and XeTeX, UTF-8 is on by default, thus not needed)
  \mainlanguage	[de]		% language mode: changes typesetting rules, quote signs etc.
  \setupbodyfontenvironment[default][em=italic] % ConTeXt's default \em is slanted, but italic is better
  
  \starttext
  Rotkäppchen:
  \quotation{Aber Großmutter, warum hast du so große Augen?}
  
  Der böse Wolf:
  \quotation{Damit ich dich besser {\em sehen} kann!}
  
  \stoptext
  

  looks like:

• 

• regime is the input encoding, i.e. what you type, so that you can use accented characters (like umlauts in the example) directly. Old encodings are supported, but use UTF-8 whenever possible. In XeTeX and LuaTeX that's the default already, so you don't need that line any more. (More on that topic in Encodings and Regimes - Old Content.)
• language is the language of your text. Besides \mainlanguage there's also \language to switch temporarily. Try your internet top level domain code as language code (de = german, fr = french, it = italian etc., see language tags).
• quotation: use logical markup instead of specified signs! You get single quotes with \quote. You can use \startquotation ... \stopquotation for longer (indented) quotes.
• em: again, logical markup! say "\emphasized" instead of bold or italics. Remember, it's a switch, not a command! (Not \em{foo}, but {\em foo}.)