Neat - I've not seen a select that way before.  Closest I've come is something along the lines of "SELECT dbo.fn(...) FROM <table>"

Only change I'd make is initialize @strReturn first, lest you call COALESCE for every single row from the table when it only applies to the first row.  (Although if NULL comes back then @strReturn will still be null - depends if that is a problem or not.)  Something like:

DECLARE

@strReturn VARCHAR(8000)

SET

@strReturn = ''

SELECT

@strReturn = @strReturn + String + ' '

FROM dbo.fnSetSplitSV('The Quick Brown Fox Jumped Over the Slow Lazy Dog',' ')

WHERE Row >= 8

SELECT

@strReturn

S.