Try this:
SELECT SerialNumber, PassFail,
CASE
WHEN [PassFail] = 1
THE 'Pass'
ELSE 'Fail'
END AS Expr1
FROM TestLog
(Note, this does not include any test for a NULL or any other number..., you may want to look up CASE in BOL and see if you want to include more...)
I wasn't born stupid - I had to study.