Character Set Support

I'm looking at an MS SQL server database and it stores city names
across the world. All a
arabic , chinese etc names are converted to the latin alphabet.

I feel it is probably critical we support accents as a means to
distinguish between cities that would be converted to the same Latin
alphabet representation otherwise and as a matter of cultural
politeness.


Now ...... how do we do this?
Use varchar? which character code page do we use?
Use nvarchar? I heard a rumour that SQL server pads unused characters
with blanks and hence will use space unnecessarily.


The data will be presented on sheets and emailed around the world - it
will also appear on a website.


Any advice greatly appreciated - thanks
Oliver