I found Serge's answer to be very promising, but I also encountered performance issues with it as-written. However, when I restructured it to use temporary tables and not include double CTE tables, the performance went from 1 minute 40 seconds to sub-second for 1000 combined records. Here it is for anyone who needs to do this without FOR XML on older versions of SQL Server:
DECLARE @STRUCTURED_VALUES TABLE (
ID INT
,VALUE VARCHAR(MAX) NULL
,VALUENUMBER BIGINT
,VALUECOUNT INT
);
INSERT INTO @STRUCTURED_VALUES
SELECT ID
,VALUE
,ROW_NUMBER() OVER (PARTITION BY ID ORDER BY VALUE) AS VALUENUMBER
,COUNT(*) OVER (PARTITION BY ID) AS VALUECOUNT
FROM RAW_VALUES_TABLE;
WITH CTE AS (
SELECT SV.ID
,SV.VALUE
,SV.VALUENUMBER
,SV.VALUECOUNT
FROM @STRUCTURED_VALUES SV
WHERE VALUENUMBER = 1
UNION ALL
SELECT SV.ID
,CTE.VALUE + ' ' + SV.VALUE AS VALUE
,SV.VALUENUMBER
,SV.VALUECOUNT
FROM @STRUCTURED_VALUES SV
JOIN CTE
ON SV.ID = CTE.ID
AND SV.VALUENUMBER = CTE.VALUENUMBER + 1
)
SELECT ID
,VALUE
FROM CTE
WHERE VALUENUMBER = VALUECOUNT
ORDER BY ID
;