When to use NULL and when to use an empty string?
Let's say that the record comes from a form to gather name and address information. Line 2 of the address will typically be blank if the user doesn't live in apartment. An empty string in this case is perfectly valid. I tend to prefer to use NULL to mean that the value is unknown or not given.

I don't believe the physical storage difference is worth worrying about in practice. As database administrators, we have much bigger fish to fry!