The “ListOfHexBinary” type is only used when you want to embed the image data in the COLLADA document. This could be a single image or a whole mipmap chain. Currently I know of no implementations that support this feature.
The “ListOfHexBinary” allows for flexibility within implementations. One implementation might want to whitespace delimit the different images, as you suggested. Another might want to whitespace delimit each row of an image. That is up to the implementation. As with any other “binary” data there are many things left to the implementations: endianness, precision, etc.