The performance increase is pretty small in most cases, but it is there. It really depends though, if the data is fixed length, you should use CHAR/NCHAR for it. If it's variable length, while data access is sped up slightly, you're increasing storage and network traffic (moving all those empty spaces around) for not much gain. Time spent tuning indexes and writing good TSQL code will be worth a heck of a lot more than worrying about the performance difference between VARCHAR(50) and CHAR(50).