$_external_char_set = "cp866"
$_internal_char_set = "cp866"
$_layout = "us"
$_X_font="-dosemu-vga-medium-r-normal--17-160-75-75-c-80-ibm-cp866"
The first two are non-important probably, layout solves (?) some issues with TRIOL and keyboard and the last one is the important one.