I'll qualify my responses as follows:

If you are designing and building a system that will be used within a single language culture then by all means choose the proper database collation and use VARCHAR. If, however, your system will be used by different cultures, then you should use NVARCHAR (Unicode).

If your system is a web-application (e.g., a SaaS offering) it should be Unicode. Also note that a lot of companies are global. Those that are not, may be in the future. If not from expansion they could be as a result of a merger or acquisition (M&A).

My company has a SaaS offering that is used globally. Some of the customers are multi-lingual -- i.e., they have global offices. Consequently, the data placed into the system is from all languages and character sets.

BOL links supporting the above:

http://technet.microsoft.com/en-us/library/ms187828(SQL.90).aspx Note the reference to (North America) Mexico, Quebec, Canada and US.

http://technet.microsoft.com/en-us/library/ms188325(SQL.90).aspx

Edit: Added BOL links