Good question. In this case I don't consider it a trick question because the lack of a length specification in the statement "DECLARE @TestVar VARCHAR" pointed to behavior based on omitting the length. At that point there is not so much trickery as a real test of knowledge of how SQL behaves in the absence of a length specification. That's a valid test of knowledge, not a trick.
I got the question wrong, but that is as it should be because I didn't know the information the question was testing for. I learned something from the question and the documentation, namely:
When n is not specified in a data definition or variable declaration statement, the default length is 1. When n is not specified when using the CAST and CONVERT functions, the default length is 30.
http://msdn.microsoft.com/en-us/library/ms176089.aspx
I assumed the length is always 30 when a length is not specified, but as the documentation states, it is sometimes 1. That's enough to make the question a valuable one, as far as I am concerned.
Thanks,
webrunner
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A SQL query walks into a bar and sees two tables. He walks up to them and asks, "Can I join you?"
Ref.: http://tkyte.blogspot.com/2009/02/sql-joke.html