Try-Catch in User Defined Function?

Apparently you can't use TRY-CATCH in a UDF.

According to this bug-reporting page for SQL Server:

Books Online documents this behaviour, in topic "CREATE FUNCTION (Transact-SQL)": "The following statements are valid in a function: [...] Control-of-Flow statements except TRY...CATCH statements. [...]"

But they were giving hope for the future back in 2006:

However, this is a severe limitation that should be removed in a future release. You should post a suggestion in this regard and I will wholeheartedly vote for it.

From MSDN:

A column or local variable of uniqueidentifier data type can be initialized to a value in the following ways:

By using the NEWID function.

By converting from a string constant in the form xxxxxxxx-xxxx-xxxx-xxxx-xxxxxxxxxxxx, in which each x is a hexadecimal digit in the range 0-9 or a-f.

For example, 6F9619FF-8B86-D011-B42D-00C04FC964FF is a valid uniqueidentifier value.

You can use pattern matching to verify the string. Note that this won't work for specific encoding that reduces the size of the GUID:

declare @Project nvarchar(50) 

declare @ProjectID uniqueidentifier 
declare @HexPattern nvarchar(268) 

set @HexPattern =  
    '[A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9]' +  
    '[A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9]' +  
    '[A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9]' +  
    '[A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9][A-F0-9]' 

/* Take into account GUID can have curly-brackets or be missing dashes */
/* Note: this will not work for GUIDs that have been specially encoded */
set @Project = '{' + CAST(NEWID() AS VARCHAR(36)) + '}'

select @Project

set @Project = REPLACE(REPLACE(REPLACE(@Project,'{',''),'}',''),'-','')

/* Cast as uniqueid if pattern matches, otherwise return null */ 
if @Project LIKE @HexPattern 
  select @ProjectID = CAST(
         SUBSTRING(@Project,1,8) + '-' + 
         SUBSTRING(@Project,9,4) + '-' + 
         SUBSTRING(@Project,13,4) + '-' + 
         SUBSTRING(@Project,17,4) + '-' + 
         SUBSTRING(@Project,21,LEN(@Project)-20)
         AS uniqueidentifier) 

select @ProjectID

I know I can't use Try-Catch in a Function, I guess a simplified questions would be, is there a way to do a cast that will just return NULL if the cast fails, instead of an error?

Starting from SQL Server 2012 you could use TRY_CAST/TRY_CONVERT functions:

Returns a value cast to the specified data type if the cast succeeds; otherwise, returns null.

CREATE FUNCTION fn_user_GetProjectID(@Project nvarchar(50))
RETURNS uniqueidentifier
AS
BEGIN
  declare @ProjectID uniqueidentifier = TRY_CAST(@Project as uniqueidentifier);

  IF(@ProjectID is null)
  BEGIN
     select @ProjectID = ProjectID from Project where projectcode = @Project;
  END

  return @ProjectID;
END