How to "aggregate" on strings

If you need to get the sum of salary by department we may be able to use Sum and group by clauses in a single select statement to get it done. But if you have a situation where you need to give a comma separated string of employees for each department, how will you handle it?
Consider these tables:

Department Table

DepartmentID	DepartmentName
1	Sales
2	IT
3	Finance

Employee Table

EmployeeID	DepartmentID	EmployeeName
1	1	Sales Person 1
2	1	Sales Person 2
3	2	Developer 1
4	2	Developer 2
5	2	DBA 1

Now you want the results like this:

DepartmentName	EmployeeList
Sales	Sales Person 1, Sales Person 2
IT	Developer 1, Developer 2, DBA
Finance	NULL

There are couple of ways of doing this:

• Loop through for each department and construct the string and store in a temporary table; Finally retrieve from that temporary table

• Use the same mechanism but use all departments at a time.  Need to loop through the rest of the employees
• Create a CLR function to do this.

Is there any other method?  Wait for tomorrow to see that.