In short, html or text based files are supposed to be transferred in ASCII mode. 

Uploading them in Binary mode will append ^M's to the end of every line. In most cases, this is OK, with html files because your browser will ignore them.

With other text files such as CGI scripts, uploading them in binary will damage them, thus causing a (server 500 error). 

This is because binary mode has added ^M's to the end of every line, which are not supposed to be in the program.

Once again, BINARY mode is used for transferring executable programs, compressed files and all image/picture files.

If you try to upload an image in ASCII mode, you observer a strange mess appearing on the page where the image is suppose to appear. 

ASCII mode in this case, has corrupted the binary coding in the jpeg or gif image.