Why Search On Empty String Returns Results With A Space?

In sql server 2000 - our QA pointed out that his testing for empty strings returned 200 + rows but that when he clicked in the field there were obviously a space there. This issue came up because of the script I created to replace and earlier one that queried on empty strings instead of datalength and the earlier script always reported that it had updated x number of rows regardless of how many times it was run on the same database.

QA query based on the earlier script:
Select * from StringTable
WHERE (LongString = '' OR LongString IS NULL)

My script:
The fields are nvarchars in the newer database but older version of the database had varchars. I had created a script to replace empty strings as follows:

-- if LongString column is varchar - run varchar update else nvarchar update
If exists (Select * from sysobjects o
inner join syscolumns c on c.id = o.id
where c.name = 'LongString' and o.name = 'StringTable' and c.xtype = 167) begin

-- update varchar LongString
UPDATE StringTable
SET LongString = char(32)
-- Select * from StringTable
WHERE ((DATALENGTH(LongString ) < 1) OR LongString IS NULL)

END
Else Begin

-- update nvarchar LongString
UPDATE StringTable
SET LongString = char(32)
-- Select * from StringTable
WHERE ((DATALENGTH(LongString ) < 2) OR LongString IS NULL)

END

If exists (Select * from sysobjects o
inner join syscolumns c on c.id = o.id
where c.name = 'ShortString' and o.name = 'StringTable' and c.xtype = 167) begin

UPDATE StringTable
SET ShortString= char(32)
-- Select * from StringTable
WHERE ((DATALENGTH(ShortString) < 1) OR ShortString IS NULL)

END
Else Begin

-- update nvarchar ShortString
UPDATE StringTable
SET ShortString= char(32)
-- Select * from StringTable
WHERE ((DATALENGTH(ShortString) < 2) OR ShortString IS NULL)

END

My method for checking for datalength appears to work correctly why doesn't the QA script? I thought it might have to do with the nvarchar used in the table but I changed the column to a varchar and still has the same issue.

Thanks