>>This causes each field to be blank filled. <<
Actually that is not what it states. Here it is again:
The SET ANSI_PADDING setting does not affect the nchar, nvarchar, ntext, text, image, and large value. They always display the SET ANSI_PADDING ON behavior. This means trailing spaces and zeros are not trimmed.
So if there are trailing spaces it is coming from your code.
But don't take my word for it, test the following out in SSMS: