Andrew,
Yes there is, use this explicit conversion:
SELECT CAST(NText1 AS VARCHAR(8000)) + CAST(NText2 AS VARCHAR(8000)) FROM TABLE1
If you have concerns about maintaining the datatype outputted the cast as follows
SELECT CAST(CAST(NText1 AS VARCHAR(8000)) + CAST(NText2 AS VARCHAR(8000))AS NTEXT) FROM TABLE1
SQL Server 7 does not support image data types and text datatypes in the fashion you'd expect. Another problem, SQL limits this cast or conversion to 8000 charactersonly.
If this proves too limiting then I'm afraid you may have to use another datatype for your fields.