Generating random strings with T-SQL

Similar to the first example, but with more flexibility:

-- min_length = 8, max_length = 12
SET @Length = RAND() * 5 + 8
-- SET @Length = RAND() * (max_length - min_length + 1) + min_length

-- define allowable character explicitly - easy to read this way an easy to 
-- omit easily confused chars like l (ell) and 1 (one) or 0 (zero) and O (oh)
SET @CharPool = 
    'abcdefghijkmnopqrstuvwxyzABCDEFGHIJKLMNPQRSTUVWXYZ23456789.,-_!$@#%^&*'
SET @PoolLength = Len(@CharPool)

SET @LoopCount = 0
SET @RandomString = ''

WHILE (@LoopCount < @Length) BEGIN
    SELECT @RandomString = @RandomString + 
        SUBSTRING(@Charpool, CONVERT(int, RAND() * @PoolLength) + 1, 1)
    SELECT @LoopCount = @LoopCount + 1
END

I forgot to mention one of the other features that makes this more flexible. By repeating blocks of characters in @CharPool, you can increase the weighting on certain characters so that they are more likely to be chosen.

Using a guid

SELECT @randomString = CONVERT(varchar(255), NEWID())

very short ...

When generating random data, specially for test, it is very useful to make the data random, but reproducible. The secret is to use explicit seeds for the random function, so that when the test is run again with the same seed, it produces again exactly the same strings. Here is a simplified example of a function that generates object names in a reproducible manner:

alter procedure usp_generateIdentifier
    @minLen int = 1
    , @maxLen int = 256
    , @seed int output
    , @string varchar(8000) output
as
begin
    set nocount on;
    declare @length int;
    declare @alpha varchar(8000)
        , @digit varchar(8000)
        , @specials varchar(8000)
        , @first varchar(8000)
    declare @step bigint = rand(@seed) * 2147483647;

    select @alpha = 'qwertyuiopasdfghjklzxcvbnm'
        , @digit = '1234567890'
        , @specials = '_@# '
    select @first = @alpha + '_@';

    set  @seed = (rand((@seed+@step)%2147483647)*2147483647);

    select @length = @minLen + rand(@seed) * (@maxLen-@minLen)
        , @seed = (rand((@seed+@step)%2147483647)*2147483647);

    declare @dice int;
    select @dice = rand(@seed) * len(@first),
        @seed = (rand((@seed+@step)%2147483647)*2147483647);
    select @string = substring(@first, @dice, 1);

    while 0 < @length 
    begin
        select @dice = rand(@seed) * 100
            , @seed = (rand((@seed+@step)%2147483647)*2147483647);
        if (@dice < 10) -- 10% special chars
        begin
            select @dice = rand(@seed) * len(@specials)+1
                , @seed = (rand((@seed+@step)%2147483647)*2147483647);
            select @string = @string + substring(@specials, @dice, 1);
        end
        else if (@dice < 10+10) -- 10% digits
        begin
            select @dice = rand(@seed) * len(@digit)+1
                , @seed = (rand((@seed+@step)%2147483647)*2147483647);
            select @string = @string + substring(@digit, @dice, 1);
        end
        else -- rest 80% alpha
        begin
            declare @preseed int = @seed;
            select @dice = rand(@seed) * len(@alpha)+1
                , @seed = (rand((@seed+@step)%2147483647)*2147483647);

            select @string = @string + substring(@alpha, @dice, 1);
        end

        select @length = @length - 1;   
    end
end
go

When running the tests the caller generates a random seed it associates with the test run (saves it in the results table), then passed along the seed, similar to this:

declare @seed int;
declare @string varchar(256);

select @seed = 1234; -- saved start seed

exec usp_generateIdentifier 
    @seed = @seed output
    , @string = @string output;
print @string;  
exec usp_generateIdentifier 
    @seed = @seed output
    , @string = @string output;
print @string;  
exec usp_generateIdentifier 
    @seed = @seed output
    , @string = @string output;
print @string;  

Update 2016-02-17: See the comments bellow, the original procedure had an issue in the way it advanced the random seed. I updated the code, and also fixed the mentioned off-by-one issue.