=>SQL Server 2000 and SQL Server 7, a row cannot exceed 8000 bytes in size. This means that a VARBINARY column can only store 8000 bytes (assuming it is the only column in a table), a VARCHAR column can store up to 8000 characters and an NVARCHAR column can store up to 4000 characters (2 bytes per unicode character). This limitation stems from the 8 KB internal page size SQL Server uses to save data to disk.
To store more data in a single column, you needed to use the TEXT, NTEXT, or IMAGE data types (BLOBs) which are stored in a collection of 8 KB data pages that are separate from the data pages that store the other data in the same table. These data pages are arranged in a B-tree structure. BLOBs are hard to work with and manipulate. They cannot be used as variables in a procedure or a function and they cannot be used inside string functions such as REPLACE, CHARINDEX or SUBSTRING. In most cases, you have to use READTEXT, WRITETEXT, and UPDATETEXT commands to manipulate BLOBs.
To solve this problem, Microsoft introduced the VARCHAR(MAX), NVARCHAR(MAX), and VARBINARY(MAX) data types in SQL Server 2005. These data types can hold the same amount of data BLOBs can hold (2 GB) and they are stored in the same type of data pages used for other data types. When data in a MAX data type exceeds 8 KB, an over-flow page is used. SQL Server 2005 automatically assigns an over-flow indicator to the page and knows how to manipulate data rows the same way it manipulates other data types. You can declare variables of MAX data types inside a stored procedure or function and even pass them as variables. You can also use them inside string functions.
The broad range of data types in SQL Server can sometimes throw people through a loop, especially when the data types seem to be highly interchangeable. Two in particular that constantly spark questions are VARCHAR and NVARCHAR: what's the difference between the two, and how important is the difference? VARCHAR is an abbreviation for variable-length character string. It's a string of text characters that can be as large as the page size for the database table holding the column in question. The size for a table page is 8,196 bytes, and no one row in a table can be more than 8,060 characters. This in turn limits the maximum size of a VARCHAR to 8,000 bytes.
The "N" in NVARCHAR means uNicode. Essentially, NVARCHAR is nothing more than a VARCHAR that supports two-byte characters. The most common use for this sort of thing is to store character data that is a mixture of English and non-English symbols — in my case, English and Japanese.
The key difference between the two data types is how they're stored. VARCHAR is stored as regular 8-bit data. But NVARCHAR strings are stored in the database as UTF-16 — 16 bits or two bytes per character, all the time — and converted to whatever codepage is being used by the database connection on output (typically UTF-8). That said, NVARCHAR strings have the same length restrictions as their VARCHAR cousins — 8,000 bytes. However, since NVARCHARs use two bytes for each character, that means a given NVARCHAR can only hold 4,000 characters (not bytes) maximum. So, the amount of storage needed for NVARCHAR entities is going to be twice whatever you'd allocate for a plain old VARCHAR.
Because of this, some people may not want to use NVARCHAR universally, and may want to fall back on VARCHAR — which takes up less space per row — whenever possible.
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