pfr I have it set to emacs. Why? I dont know.. I initially copied my .shrc from @pin and never gave it another thought. However, I dont use (or know how to use) emacs so should I change it to vi or can I simply set it to use vim ?
As nia said, mode affects the way the interactive shell will respond to user's input, for it may have vi or emacs like bindings and behavior. Emacs mode is more intuitive (standard navigation with arrow keys, Delete erases backwards).
This has nothing to do with your editor of choice however and doesn't affect the way the shell parses input and scripts.
ksh93 also provides gmacs mode as a third alternative.
As the sh(1) man page suggests, you can further adjust interactive shell bindings by configuring the editline library in your ~/.editrc (NetBSD doesn't use readline, so a Linux inputrc file is not going to work).