How do I edit UTF-8 encoded files with Emacs?

[Jim MacBaine <jmacbaine@gmail.com>]

Hello,

Short question: How do I edit UTF-8 encoded files with Emacs? Those
files contains German quotation marks, Umlauts and other interesting
things.

Long explanation: I'm in the need to reply to windows-1251-encoded
emails and to keep all those special characters like the ellipses,
German quotation marks, etc intact.  In fact I'm proof-reading texts
that other people write. I like to use mutt from Sarge for most of my
eMails, with Emacs as editor.

The setup I have so far works quite good:  I run mutt in an utf-8
xterm, and set charset=utf8 in .muttrc.  This way I can see all the
strange characters and with

    set editor="vim -c 'set encoding=utf-8' -c 'set fileencoding=utf-8'"

in .muttrc I can even edit my mails correctly.  But how do I do that with emacs?
How do I tell emacs that the file I'm editing is utf-8-encoded? 

Regards,
Jim