Battle Sails is a state of a ship in Sea Combat where some of the sails are furled. It occurs automatically when your ship's speed is set to less than 75%. This has a defensive effect for the sails, making them harder to hit with Dismantling Shot, and is in general a good speed vs. accuracy point for most ships.
Insert image of battle sails vs. full sails.
Setting Battle Sails[]
Rigging your ship for Battle Sails is most easily achieved by pressing the B hotkey (by default) on your keyboard. It can also be achieved by manually adjusting the ship speed slider to below the 75% horizontal mark.
You will know you have Battle Sails when your ship begins to furl some of its lowest sails (or rear sail on some ships with triangular sails).
Sail Defense[]
When Battle Sails are set, you gain a +15 defense bonus to your sails. This gives a 15% accuracy penalty to cannon aiming at your sails. Since the shot must be aiming specifically at the sails, battle sails only applies to Dismantling Shot.[1]
Accuracy[]
Battle Sails do not directly affect accuracy.
The horizontal line in the speed meter at around 80% of the maximum indicates the speed where many ships have a good balance between speed and accuracy[1]. A ship receives a 2% penalty to accuracy for each knot of speed. The Target Tracking of the ship reduces this penalty by 1% for each point. The indicator is often at a place just beyond where the maximum effect of Target Tracking has been reached and speeds beyond it will strongly decrease accuracy.
By setting Battle Sails you put the Speed Slider below this indicator. This way you prevent your speed from decreasing accuracy too much even while sailing with the wind at your Best Point. However the speed (the blue bar filling the speed meter) is what you should look at, not the position of the Speed Slider. While sailing towards slow points, such as upwind, you will maintain a good accuracy even while setting the Speed Slider to its maximum[1].
In the end it is about Speed versus Target Tracking and so this might differ from ship to ship and be affected by skills you employ that change either your speed or your accuracy directly. The indicator and the Battle Speed are a good way to start experimenting with the relation between speed and accuracy but ultimately your own experience should become the most important factor.