Values up to 254 characters are stored as short strings, with a preceding length byte. Any values that are longer than 255 bytes are considered long strings. Characters after the 255th are stored separate from the row containing the long string value.
SQL Anywhere treats CHAR, VARCHAR, and LONG VARCHAR columns all as the same type.
There are several functions that will ignore the part of any string past the 255th character. They are soundex, similar, and all of the date functions. Also, any arithmetic involving the conversion of a long string to a number will work on only the first 255 characters. It would be extremely unusual to run in to one of these limitations.
All other functions and all other operators work with the full length of long strings.