The extended stored procedure is programs written in c/c++ and similar to a stored procedure like they accept PARAMETER but the result SET is returned through SQL server’s open data services API. It runs from SQL server process memory only and stored in a master database. It does not run from the current database context and to trigger extended stored procedure we need to pass the fully qualified name like master.dbo.xp_*. The BEST is WRAPPING extended stored proc under system procedure so you do not need to call extended one with the fully qualified name.

The cleaning of parameters to be passed to extended stored procedure xp_varbintohexstr  is taken CARE of by

sp_hexstring. sp_hextsring can be executed from any database context without being referenced by a qualifier. The above is an example of wrapping extended procedures inside the system procedure. Once you call the extended stored procedure, the request transfers in the tabular data stream or in SOAP format from calling application to SQL server.