Solidity Keccak – Reasons for Different keccak256 Hashes of the Same String

Use web3.js like contractInstance.getItem.call(key).

Or mark getItem as constant: function getItem(address key) constant returns (string) and then you can use:

contractInstance.getItem(key)

web3.js will automatically decode the bytes for you. Contracts only have binary data, hex is a more compact way of viewing that data, and that's why you see hex. The binary data is also encoded according to an ABI, so that values can be distinguished, for example between what's just a number and a string.

try this snipet

function bytes32ToString(bytes32 x) constant returns (string) {
    bytes memory bytesString = new bytes(32);
    uint charCount = 0;
    for (uint j = 0; j < 32; j++) {
        byte char = byte(bytes32(uint(x) * 2 ** (8 * j)));
        if (char != 0) {
            bytesString[charCount] = char;
            charCount++;
        }
    }
    bytes memory bytesStringTrimmed = new bytes(charCount);
    for (j = 0; j < charCount; j++) {
        bytesStringTrimmed[j] = bytesString[j];
    }
    return string(bytesStringTrimmed);
}

 function someFunction(bytes32 _string) returns(bool){
    bool result = false;
    bytes32 hashparameter = sha3(bytes32ToString(_string));
    bytes32 hashstring = sha3("hello");
    if(hashstring == hashparameter) {
        result = true;
    }

    return result;

}

the first function converts bytes32 to string then passes the result to hashing function. I've tried it gives true for "hello".