The MIME Content-Transfer-Encoding: header describes what auxiliary encoding was applied to the message body to allow it to pass through email transport mechanisms that might have data or character set limitations. Specifically, RFC821 requires message bodies to contain only 7-bit data. To transport 8-bit data (such as images and sounds) unless 8-bit is negotiated, it is necessary to convert that data to 7 bits. The Content-Transfer-Encoding: header specifies precisely how that conversion was done:

Content-Transfer-Encoding: how

Here, how is defined by RFC2045 to be one of the following: base64 (RFC2045), quoted-printable (RFC2045, EightBitMode), 8bit (meaning that the message body contains unencoded 8-bit data in line length suitable for SMTP transport), 7bit (the message body contains 7-bit, SMTP-compliant data), or binary (the message body contains 8-bit data in a form that is completely unsuitable for SMTP transport).

See the EightBitMode option (EightBitMode) for a description of how V8 sendmail converts between 8- and 7-bit data. The Content-Transfer-Encoding: header should never be declared in the configuration file.