Mode I and Mode II have nothing to do with PCM, PPM, AM or FM. Mode refers to the way the sticks are set up to control diffeent flight functions.

For example, Mode II is usually used and is set up like this;
Right hand stick: Side to Side is Ailerons, Forward and Back is Elevator.
Left hand stick: Side to Side is Rudder, Forward and Back is Throttle.

In Mode I the throttle and Elevator functions switch sticks. (Throttle is now forward and back on the right stick, elevator is on the left.)
Dennis-