I don't think that there is any easy answer.

One of the examples in the "Update your development skills to SQL2005" course uses a CLR datatype to hold an IP address.

I will have to experiment to see if that works.

The dilema I am facing is that on one hand I need efficient storage but on the other I need readable data.

I haven't index a calculated field so I'm not sure if the field is calculated on the fly or whether it is materialised.