This all has to do with how data larger than a byte is actually stored in memory. The CPU expects 16bit and 32bit, and larger, data to be ordered in one of the two ways listed below. SDL has macros which you can use to determine which endian your program will be using.
Latin-1 is an extension of ASCII, where ASCII only defines characters 0 through 127. Latin-1 continues and adds more common international symbols to define through character 255.