Hum, your post is very very confusing.
Everytime I write something on the file that contains $chr(160) it replaces it with "Â".
This doesn't mean anything, are you using /write with $chr(160) and it doesn't write the $chr(160) correctly? if so what does it write to the file, how are you checking that it didn't write to the file correctly?
If you are unaware, mIRC will write to the file with Unicode, that means $chr(160) will be wrote as the two bytes 194 and 160, which will, when $read back to mirc be combined to form the real $chr(160), could it be that you didn't know that and that's why got you confused?
In any case please describe as much as possible your problem and don't bring ttwich, it's not a problem with twitch.
@Loki, how do you figure it's a BOM problem? mIRC uses it fine, it's there if /write to a file (which is an unicode file already or doesn't exist)