"Local echo" is usually only a required thing if you're directly using an old-school terminal interface as a human.
Local echo being on means that every keystroke that is pressed locally is both sent as a signal to whatever you're communicating with as well as shown on-screen. Most of the time if you're just typing normally you want this, to get feedback on whether what you just think you typed is what you really typed. Since it's local, it also means there's no delay and you see your own key presses immediately on your screen. It also saved small amounts of bandwidth, which doesn't matter much now but mattered back in the 1970s-1990s when this sort of interface was used on the early Internet or local networks.
However, there are cases where it's not great to have a local echo enabled. Typing in your password is an obvious example of something you don't want shown on your screen, but it can also be things like if you have a menu interface that you're using and you make a selection, you don't necessarily want to see your menu selection typed out. So sometimes it needs to be off.
So most devices that accept connections will either tell you that you need local echo on (meaning that they won't be actively telling you to display what you typed on the screen, they just assume you do it) or local echo off (meaning that they will selectively send back to you what they think you need to see). Some more complicated protocols (Telnet, for example) have command codes that signal the client which one to use.
So the question is, are you doing something in LabVIEW where you are just typing in a window and sending those characters at the same time? Because if not, then you probably don't need to worry about local echo.
If you're still not sure, tell us more about exactly what you are doing.
