First of all, specify a type when defining a variable:
Dim str As String, etc. Next, you don't always need to declare a variable - you could just as easily write it like this:
Private Sub Button1_Click(ByVal sender As System.Object, ByVal e As System.EventArgs) Handles Button2.Click
Dim lbloc As Int16
Dim rbloc As Int16
lbloc = InStr(rtb1.Text, "<")
rbloc = InStr(rtb1.Text, ">")
rtb2.Text = rtb2.Text + " " + Mid(rtb1.Text, lbloc, rbloc)
rtb1.Text = Mid(rtb1.Text, rbloc + 1, rtb1.Text.Length)
End Sub