If you want a single row at a time you can do this:

declare @string varchar(255), @col1_value varchar(25)

set @string = ''

set @col1_value = 'A'

select @string = @string + col2 + ' '

from table_1

where col1 = @col1_value

print @string

If you want multiple rows, you might want to put the code into a User Defined Function (pass in Col1, return denormalised string) and then do something like this:

select distinct col1, dbo.fn_Denormalise(col1)

from table_1

I'm not sure whether this would be any quicker than your coding but it is an alternative.

Jeremy