Interesting article, I recently had a "show-stopping" application bug that traced back to this setting (in combination with other factors). In my research in BOL, I don't think I found anything as succinct as your summation - thanks.

I have for certain tables turned this option OFF. It was the simplest solution to fix the above bug in an application that depended on tables that were fed monthly through a convoluted ETL process (I inherited, not wrote). The author of the ETL process was apparently depending on this setting being OFF. When I refactored and rebuilt a table with the defaults (PADDING ON) I introduced the bug. So I rebuilt the table with PADDING OFF, until I can do it "right" by fixing the ETL process to explicitly perform the needed trims.

JasonL