I've had some good results from this in recent years:

USE [Matching]

GO

/****** Object: UserDefinedFunction [dbo].[IF_Levenshtein01] Script Date: 25/07/2013 10:00:08 ******/

SET ANSI_NULLS ON

GO

SET QUOTED_IDENTIFIER ON

GO

-- this will score around 10,000 word pairs per second on 2010 laptop technology

alter FUNCTION [dbo].[IF_Levenshtein02]

(

@Reference VARCHAR(20), @Target VARCHAR(20)

)

RETURNS TABLE WITH SCHEMABINDING AS

RETURN

( -- output query

SELECT [Score %] = CASE

WHEN @Reference = @Target THEN CAST(100 AS NUMERIC(5,2))

WHEN 0 = 1 THEN CAST(100 AS NUMERIC(5,2))-- placeholder for any other shortcuts

ELSE

(SELECT

[Score %] = CAST(SUM(LetterScore)*100.0/MAX(WordLength*WordLength) AS NUMERIC(5,2))

FROM ( -- do

SELECT

seq = t1.n,

ref.Letter,

v.WordLength,

LetterScore = v.WordLength - ISNULL(MIN(tgt.n),v.WordLength)

FROM ( -- v

SELECT

Reference = LEFT(@Reference + REPLICATE('_',WordLength),WordLength),

Target = LEFT(@Target + REPLICATE('_',WordLength),WordLength),

WordLength = WordLength

FROM ( -- di

SELECT WordLength = MAX(WordLength)

FROM (VALUES (DATALENGTH(@Reference)),(DATALENGTH(@Target))) d (WordLength)

) di

) v

CROSS APPLY ( -- t1

SELECT TOP(WordLength) n

FROM (VALUES (1),(2),(3),(4),(5),(6),(7),(8),(9),(10),(11),(12),(13),(14),(15),(16),(17),(18),(19),(20)) t2 (n)

) t1

CROSS APPLY (SELECT Letter = SUBSTRING(Reference,t1.n,1)) ref

OUTER APPLY ( -- tgt

SELECT TOP(WordLength) n = ABS(t1.n - t2.n)

FROM (VALUES (1),(2),(3),(4),(5),(6),(7),(8),(9),(10),(11),(12),(13),(14),(15),(16),(17),(18),(19),(20)) t2 (n)

WHERE SUBSTRING(@Target,t2.n,1) = ref.Letter

) tgt

GROUP BY t1.n, ref.Letter, v.WordLength

) do

)

END

) -- output query

GO

SELECT * FROM [dbo].[IF_Levenshtein02] ('summer day','Sommarskog')

Score %

--------

52.00