Try:
DECLARE @varbinaryField varbinary(max);
SET @varbinaryField = 0x21232F297A57A5A743894A0E4A801FC3;
SELECT CONVERT(varchar(max),@varbinaryField,2),
@varbinaryField
UPDATED:
For SQL Server 2008
Try:
DECLARE @varbinaryField varbinary(max);
SET @varbinaryField = 0x21232F297A57A5A743894A0E4A801FC3;
SELECT CONVERT(varchar(max),@varbinaryField,2),
@varbinaryField
UPDATED:
For SQL Server 2008