Junte duas tabelas, use apenas o valor mais recente da tabela correta

;WITH m AS 
(
   SELECT Partnum, Formula, RevisionNum,
     rn = ROW_NUMBER() OVER (PARTITION BY PartNum ORDER BY 
       CASE WHEN RevisionNum ='New' THEN 1 ELSE 2 END)
     FROM dbo.Material
)
SELECT p.PartNum, m.Formula, m.RevisionNum
FROM dbo.Parts AS p
INNER JOIN m ON p.PartNum = m.PartNum
WHERE m.rn = 1;