>>It implicity converts '1' to the higher precedence which is integer.
>>
>>Take a look at this
>>Data Type Precedence (Transact-SQL)
>>
>>Integer has higher precedence than char.
>
>Interesting, thanks

You would not believe it, but I just had to deal with a very similar problem myself - fixing bug in my code.

I wrote about it here
http://beyondrelational.com/justlearned/posts/748/be-careful-with-implicit-conversions.aspx