SQL Server – Collation Sequences
Collation sequence control how server treats character data for storage, retrieval, and sorting and comparison operation. SQL Server 2008 allows you to specific sequence to support any language currently used around the word.
Collation sequence can be specified at instance, database, table and column level.
The only collation sequence that is mandatory is defined at instance level, which defaults to all other level unless it is overridden specifically.
A Collation sequence defines the character set that is supported, including case sensitivity, accent sensitivity and kana sensitivity.
Related Articles:
Understanding SQL Server Collation Sequences
http://www.sqlserverclub.com/articles/understanding-sql-server-collation-sequences.aspx
Setting and Changing the Server Collation
http://msdn.microsoft.com/en-us/library/ms179254.aspx