CHARACTER, CHARACTER FREQ – These two parameters control a powerful inverse homomorphic filter which adjusts tone dynamically in a very musical way. CHARACTE FREQUENCY sets the center frequency of the filter while CHARACTER sets how pronounced the effect is. To darken the tone when playing harder, one might set the frequency to 10000 Hz and the amount to a negative value. A positive setting would have the reverse effect of brightening the amp when pushed. CHARACTER defaults to zero when amp type is changed.
I don't personally know WTF a inverse homomorphic filter is, but I usually set the frequency around 500hz and boost or cut depending on the individual tone. It works equally well on the high end too if you're battling ice pick attack there and still want the highs to ring through. To me it's almost like a lossless eq, it sucks or boosts the bad characteristics out of a particular frequency while preserving the good ones. It's entirely possible that I'm talking out of my ass, but that's what it sounds like.