Unicode
Unicode has become the dominant scheme for internal processing and storage of text. Although a great deal of text is still stored in legacy encodings, Unicode is used almost exclusively for building new information processing systems. Early adopters tended to use UCS-2 (the fixed-width two-byte precursor to UTF-16) and later moved to UTF-16 (the variable-width current standard), as this was the least disruptive way to add support for non-BMP characters. The best known such system is Windows NT (and its descendants, Windows 2000, Windows XP, Windows Vista and Windows 7), which uses UTF-16 as the sole internal character encoding. The Java and .NET bytecode environments, Mac OS X, and KDE also use it for internal representation. Unicode is available on Windows 95 through Microsoft Layer for Unicode, as well as on its descendants, Windows 98 and Windows ME.
What was the two-byte precursor to UTF-16? 
UCS-2
Early adopters tended to use UCS-2 (the fixed-width two-byte precursor to UTF-16) and later moved to UTF-16 (the variable-width current standard), as this was the least disruptive way to add support for non-BMP characters.
UTF-16