There is one thing that I do not understand: I do have a nvarchar(50) field, optional or required - it does not matter. Now, when I intantiate a new object of that entity the string properties are set to empty string and not to null. So if I save the entity (entity.SaveEntity(entity,true) I end up having empty strings in the database where I shoudl excpect to have null values. What I am doing wrong here?

There is a setting for it in the Designer. Go to Project Setting/Conventions/Entity Model/LLBLGen Pro Runtime Framework

There under General you should find Convert null reference types to default value. Un-check it, or set it to false, to get null values instead of the default type value.

Many thanks! That quite settles it.