On my dev machine I installed R2 alongside my existing 2005 instance and it did a funny thing with the new instance’s collation. Our servers are all on Latin1_General_CI_AS, including my 2005 dev instance. But my R2 instance defaulted to SQL_Latin1_General_CI_AS and I’ve only just noticed, which is a damn nuisance. I thought I checked the collation during the setup but I guess I did a mental LIKE ‘%Latin1_General_CI_AS’. I think this article (http://msdn.microsoft.com/en-us/library/ms143508.aspx) explains the reasoning:
SQL Server Collations (SQL_*) Select this option to match settings with English-language versions SQL Server 2005 or earlier versions.
Presumably it detected the 2005 instance and was trying to be helpful. Close but no cigar. Just as well my machine is long overdue for a rebuild anyway.