How do I set the frames per second with Time.deltaTime?

Can someone show me an example of setting the fps with Time.deltaTime? Also, what should I know about FixedTimestep and how its related to the fps I set?

I'm not sure you understand; Time.deltaTime is the time in seconds it took to complete the last frame. So at 60 FPS, it will be 0.0166 recurring.

Everywhere that you make changes to movement/speed (etc), you should multiply the change by Time.deltaTime - in this way, the movement/speed becomes independent of frame rate.

One quick example to demonstrate. If you had the following code:

function Update()
{
   transform.position.z += 1;
}

Every frame, the object would move forward 1 unit. If the camera looked at the floor, your framerate might increase, so the movement of the object would also increase. Multiplying the movement by Time.deltaTime ensures that the movement is independent of frame rate. For example:

function Update()
{
   transform.position.z += (1 * Time.deltaTime);
}

At 60 frames per second, the object would be moved forward by 0.0166 units every frame. If the camera then looked at the floor and the framerate jumped to 200 frames per second, the object would only move 0.005 units per frame. Overall, this would mean the object moved at 1 unit per second - independent of the framerate.

http://unity3d.com/support/documentation/ScriptReference/Application-targetFrameRate.html