Depends on what you're doing. See the relevant documentation page for some of the details:
http://dev.mysql.com/doc/refman/5.0/en/char.html
The penalty in disk space isn't really any different than what you have for e.g. TEXT types, and from a performance perspective it MAY actually be faster.
The primary problem is the maximum row size. Note that the exact implications of this differ between storage engines. Consult the MySQL docs for your storage engine of choice for maximum row size information.
I should also add that there can be performance benefits to minimizing row size, but it really depends on your workload, indexing, and just how big the rows are, whether or not it will be meaningful for you.