Well, in theory you should be able to type ß using ALT followed by its ASCII code (225) - I'm saying "in theory" because I've just discovered that it won't work on my machine. If that doesn't work use ss - not b. For other German characters ä is ae, ö is oe and ü is ue - though simply leaving off the dots also seems acceptable; I've seen both Luebeck and Lubeck for Lübeck, for example.

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To get back on-topic... the signs above the seats really only need to concern you if you don't have a reservation, because they tell you whether or not a seat is reserved, or if it's a special seat... such as a seat which you have to give up for a disabled person (as in the example shown), or as stut mentions a seat which you have to give up if someone flashes a Deutsche Bahn frequent traveller card at you.

If all your travel goes to plan then, as I said, these signs don't really have to concern you - but it's useful to know what they mean in case your travel doesn't go to plan and you find yourself without a reserved seat.

For example... If you miss a connection then you can continue your journey on the next available train, even on a non-flexible ticket - but you won't have a reserved seat on that train, so you will have to find a seat that isn't reserved, or that isn't reserved for your particular stretch of a journey. Travelling without a reservation sometimes means having to play "musical seats" - i.e. sit in a particular seat until you get to the station from which someone else has a reservation, then grab the seat of someone who has just got off.... and repeat the process as necessary.

And I should perhaps also mention that there may, very occasionally, be circumstances where you find yourself without a reserved seat even if you're on the right train. It doesn't happen very often, so don't fret about it - but it does happen. For example, sometimes, usually due to an equipment failure, a train may end up with (say) nine coaches instead of ten - and if it's coach 256 that's missing, and that's where you have a reserved seat, then you have to find somewhere else to sit.

Also, something that happened to me last month... the ICE (high speed) train on which I was due to travel had broken down earlier in the day, and they replaced it by some random coaches randomly cobbled together... we all got to where we were going (and got there almost on time), but none of us had reserved seats. There was no anger, no panic, no chaos.... everybody just got on and found themselves somewhere to sit. (I was slightly miffed because the replacement train was all second class and I had a first class ticket... but, well, just one of those things!)