varbinary to string on SQL Server

"Converting a varbinary to a varchar" can mean different things.

If the varbinary is the binary representation of a string in SQL Server (for example returned by casting to varbinary directly or from the DecryptByPassPhrase or DECOMPRESS functions) you can just CAST it

declare @b varbinary(max)
set @b = 0x5468697320697320612074657374

select cast(@b as varchar(max)) /*Returns "This is a test"*/

This is the equivalent of using CONVERT with a style parameter of 0.

CONVERT(varchar(max), @b, 0)

Other style parameters are available with CONVERT for different requirements as noted in other answers.

The following expression worked for me:

SELECT CONVERT(VARCHAR(1000), varbinary_value, 2);

Here are more details on the choice of style (the third parameter).