I have code in Sql Server 2008 which concatenates some strings from a query into a variable using the tried-and-true SELECT @VAR = @VAR + FIELD FROM TABLE ORDER BY OTHERFI
As indicated in the comments you are relying on undocumented behaviour.
Microsoft say "The correct behavior for an aggregate concatenation query is undefined.". If the compute scalar moves to the wrong place in the plan then it just stops working.
The work around you are using of defining the ordering expression in a sub-query and concatenating the results of this query I believe is safe . From Ordering guarantees in SQL Server...
For backwards compatibility reasons, SQL Server provides support for assignments of type SELECT @p = @p + 1 ... ORDER BY at the top-most scope.
That posting was written in 2005 though so I'm not sure if the guarantee still holds (Edit: After reviewing Connect Items on this issue I'm sure that it doesn't)
BTW: You say
I cannot use the XML/STUFF route because some of the data does have < and > signs in it. I'd rather not have to go back to using an old WHILE loop, but I may have to.
This is not the case but it needs a slightly more complicated XML PATH
query than you were probably using see the answer here for an example.