What's the difference between CHAR and VARCHAR?

The most important difference is that CHAR is padded with spaces and VARCHAR is not. For example, if you have:

CREATE TABLE t1 (
c1 VARCHAR(2),
c2 CHAR(2)
);

INSERT INTO t1 (c1,c2) VALUES ('a', 'a');

The column c1 will contain value 'a', while column c2 will contain value 'a ' with additional space. Trailing spaces are ignored when doing comparisons, so both columns would match the

WHERE c = 'a'

clause of some query. Trailing spaces are respected by LIKE operator, which is a source of confusion for beginners (example in FAQ #309).