During my testing, I’ve found R handles CHAR and VARCHAR data within the input data set as long as the ASCII codes comprising the data is in the range from 0 to 127. This much is not surprising–those are the character codes for the ASCII table. Starting with character code 128, R begins having some trouble.
Read on to see the problem. Dave’s advice at the end is sound (and frankly, my advice for any string data in SQL Server).