Datatype Question Varchar(max), Varchar(250), Or Char(250)

I have a table that contains a lot of demographic information. The data is usually small (<20 chars) but ocassionally needs to handle large values (250 chars). Right now its set up for varchar(max) and I don't think I want to do this.

How does varchar(max) store info differently from varchar(250)? Either way doesn't it have to hold the container information? So the word "Crackers" have 8 characters to it and information sayings its 8 characters long in both cases. This meaning its taking up same amount of space?

Also my concern will be running queries off of it, does a varchar(max) choke up queries because the fields cannot be properly analyzed? Is varchar(250) any better?

Should I just go with char(250) and watch my db size explode?

Usually the data that is 250 characters contain a lot of blank space that is removed using a SPROC so its not usually 250 characters for long.

Any insight to this would be appreciated.