SQL Server converting varbinary to string

Try:

DECLARE @varbinaryField varbinary(max);
SET @varbinaryField = 0x21232F297A57A5A743894A0E4A801FC3;

SELECT CONVERT(varchar(max),@varbinaryField,2), 
@varbinaryField

UPDATED: For SQL Server 2008

I know this is an old question, but here is an alternative approach that I have found more useful in some situations. I believe the master.dbo.fn_varbintohexstr function has been available in SQL Server at least since SQL2K. Adding it here just for completeness. Some readers may also find it instructive to look at the source code of this function.

declare @source varbinary(max);
set @source = 0x21232F297A57A5A743894A0E4A801FC3;
select varbin_source = @source
,string_result = master.dbo.fn_varbintohexstr (@source)

If you want to convert a single VARBINARY value into VARCHAR (STRING) you can do by declaring a variable like this:

DECLARE @var VARBINARY(MAX)
SET @var = 0x21232F297A57A5A743894A0E4A801FC3
SELECT CAST(@var AS VARCHAR(MAX))

If you are trying to select from table column then you can do like this:

SELECT CAST(myBinaryCol AS VARCHAR(MAX))
FROM myTable