You should not store XML as a string. If you can change this, you should really use a natively typed XML column!
Why: The XML is not stored as the string you see, but as a hierarchy tree. Dealing with this tree does not need string parsing. But in your case you'll have to re-create this hierarchy tree in each call. This is very expensive!
Try it like this:
DECLARE @mockup TABLE(ID INT IDENTITY,YourStringXML XML);
INSERT INTO @mockup VALUES
(N'<Datatype id="76" name="Disp_Dest" hdl="47/4/SB8_3-910-8243-19/0/76" odobjid="385">
<Datatypevalue id="1" name="LowPressureRinse" />
<Datatypevalue id="0" name="ShortInlet" />
</Datatype>')
,(N'<Datatype id="11" name="SomeOther" hdl="blah" odobjid="111">
<Datatypevalue id="1" name="blubb" />
<Datatypevalue id="0" name="foo" />
</Datatype>');
SELECT m.ID
,A.Casted.value(N'/Datatype[1]/@id',N'int') AS dt_Id
,A.Casted.value(N'/Datatype[1]/@name',N'nvarchar(max)') AS dt_name
,A.Casted.value(N'/Datatype[1]/@hdl',N'nvarchar(max)') AS dt_hdl
,A.Casted.value(N'/Datatype[1]/@odobjid',N'nvarchar(max)') AS dt_odobjid
,dtv.value(N'@id',N'int') AS dtv_Id
,dtv.value(N'@name',N'nvarchar(max)') AS dtv_name
FROM @mockup AS m
OUTER APPLY (SELECT CAST(m.YourStringXML AS XML)) AS A(Casted)
OUTER APPLY A.Casted.nodes(N'/Datatype/Datatypevalue') AS B(dtv);
Just change @mockup to your actual table's name and adjust the column names.
The first APPLY will get the XML typed, the second APPLY uses .nodes() to get the internal <Datatypevalue> elements.
The result
+----+-------+-----------+-----------------------------+------------+--------+------------------+
| ID | dt_Id | dt_name | dt_hdl | dt_odobjid | dtv_Id | dtv_name |
+----+-------+-----------+-----------------------------+------------+--------+------------------+
| 1 | 76 | Disp_Dest | 47/4/SB8_3-910-8243-19/0/76 | 385 | 1 | LowPressureRinse |
+----+-------+-----------+-----------------------------+------------+--------+------------------+
| 1 | 76 | Disp_Dest | 47/4/SB8_3-910-8243-19/0/76 | 385 | 0 | ShortInlet |
+----+-------+-----------+-----------------------------+------------+--------+------------------+
| 2 | 11 | SomeOther | blah | 111 | 1 | blubb |
+----+-------+-----------+-----------------------------+------------+--------+------------------+
| 2 | 11 | SomeOther | blah | 111 | 0 | foo |
+----+-------+-----------+-----------------------------+------------+--------+------------------+