I have a SQL Server 2008 database that stores millions of rows. There are several NVARCHAR columns that will never exceed the current max length of the column, nor get close to it due to application constraints.
i.e. The Address NVARCHAR field has a length of 50 characters, but it'll never exceed 32 characters.
Is there a performance benefit or space saving benefit to me reducing the size of the NVARCHAR column to what it's actual max length will be (i.e. in the case of the Address field, 32 characters). Or will it not make a difference since it's a variable length field?
Setting the number of characters in NVARCHAR is mainly for validation purposes. If there is some reason why you don't want the data to exceed 50 characters then the database will enforce that rule for you by not allowing extra data.
If the total row size exceeds a threshold then it can affect performance, so by restricting the length you could benefit by not allowing your row size to exceed that threshold. But in your case, that does not seem to matter. The reason for this is that SQL Server can fit more rows onto a Page, which results in less disk I/O and more rows can be stored in memory.
Also, the maximum row size in SQL Server is 8KB as that is the size of a page and rows cannot cross page boundaries. If you insert a row that exceeds 8KB, the extra data will be stored in a row overflow page, which will likely have a negative affect on performance.