The ANSI_PADDING affects the CHAR types too - surprised the hell out of me when I finally discovered why my tables weren't linking!

doing a simple select '<' + prod_code + '>' from ... showed it to only contain 7 characters with no trailing white space.

select '<' + cast(prod_code as char(10)) + '>' from ... showed up the trailing 3 spaces (and then allowed EF4 to link the data to another table that had ANSI_PADDING set to ON)

We're using SQL Server 2005 here - give it a shot and see if you get the same results