underlying structure: varchar vs. text

I'm trying to store anywhere from a few words to a half page of text as a
field in my table. A fellow db programmer told me that better than using a
varchar is to break the message up into n pieces of size m (let's say m=100),


and make n (or n+1) varchar(m)s, and relate them together.

He is worried that varchars allocate and hold space.
I'm not sure if that is actually more efficient, nor do I know the limit
of how big you can make a varchar.

Additionally, at what size is it practical to use a text type?

I'm running postgreql 7.0.3

Thank you,
b





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