What's the difference between VARCHAR and NVARCHAR data types and when do I use them?

VARCHAR and NVARCHAR data types are both character data types that are variable-length.  Below is the summary of the differences between these 2 data types:

	VARCHAR(n)	NVARCHAR(n)
Character Data Type	Non-Unicode Data	Unicode Data
Maximum Length	8,000	4,000
Character Size	1 byte	2 bytes
Storage Size	Actual Length (in bytes)	2 times Actual Length (in bytes)

You would use NVARCHAR data type for columns that store characters from more than one character set or when you will be using characters that require 2-byte characters, which are basically the Unicode characters such as the Japanese Kanji or Korean Hangul characters.

http://www.sql-server-helper.com/faq/data-types-p01.aspx