It would seem that Oracle at one time had plans to give a different definition to VARCHAR than to VARCHAR2. It has told customers this and recommends against using VARCHAR. Whatever their plans were, as of 11.2.0.2 VARCHAR is identical to VARCHAR2. Here is what the SQL Language Reference 11g Release 2 says:
Do not use the VARCHAR data type. Use
the VARCHAR2 data type instead.
Although the VARCHAR data type is
currently synonymous with VARCHAR2,
the VARCHAR data type is scheduled to
be redefined as a separate data type
used for variable-length character
strings compared with different
comparison semantics.
The PL/SQL User's Guide and Reference 10g Release 2 puts it this way:
Currently, VARCHAR is synonymous with
VARCHAR2. However, in future releases
of PL/SQL, to accommodate emerging SQL
standards, VARCHAR might become a
separate datatype with different
comparison semantics. It is a good
idea to use VARCHAR2 rather than
VARCHAR.
The Database Concepts 10g Release 2 document says the same thing in stronger terms:
The VARCHAR datatype is synonymous
with the VARCHAR2 datatype. To avoid
possible changes in behavior, always
use the VARCHAR2 datatype to store
variable-length character strings.
The Oracle 9.2 and 8.1.7 documentation say essentially the same thing, so even though Oracle continually discourages the use of VARCHAR, so far they haven't done anything to change it's parity with VARCHAR2.