(Second revision) Try this:
SELECT CASE WHEN LEN(ISNULL(<columnName>, '')) > 1
THEN ISNULL(<columnName>, '')
ELSE RIGHT ('00'+ ISNULL(<columnName>, ''), 2)
END
Sample input/output:
Input NULL / Ouput '00'
Input 'UNK' / Ouput 'UNK'
Input '1' / Ouput '01'
Input '99' / Ouput '99'