IDNA is a standard way to encode non-ASCII domain names into a readable ASCII string. The details can be found in RFC 3490.
Message is a IDNA-compliant posting agent. The user
generally doesn’t have to do anything to make the IDNA
happen—Message will encode non-ASCII domain names in From,
To, and CC headers automatically.
Until IDNA becomes more well known, Message queries you whether IDNA encoding of the domain name really should occur. Some users might not be aware that domain names can contain non-ASCII now, so this gives them a safety net if they accidentally typed a non-ASCII domain name.
The message-use-idna variable control whether IDNA is
used. If the variable is nil no IDNA encoding will
ever happen, if it is set to the symbol ask the user will be
queried, and if set to t (which is the default if IDNA
is fully available) IDNA encoding happens automatically.
If you want to experiment with the IDNA encoding, you can invoke M-x message-idna-to-ascii-rhs RET in the message buffer to have the non-ASCII domain names encoded while you edit the message.
Note that you must have GNU Libidn installed in order to use this functionality.