Since you're in SQL Server 2000, we can't use any CTE for this. That said - you should be able to use a temp table to get the ordering down.

You will also need a tally table to help with filling in the gaps (see Jeff's article on how to set one up[/url])

The script would look something like the following:

declare @maxdt datetime

select @maxdt=MAX(dateval) from table1

create table #orderedGaps (seq int identity(1,1), dateval datetime, valone int, val2 int)

insert into #orderedGaps (dateval, valone,valtwo)

select date, A, B from table1

order by date

select o1.seq ,dateadd(day,rn-1,o1.dateval) ajustedDateVal,o2.dateval, o1.valone, o1.valtwo

from #orderedgaps o1 left join orderedGaps #o2 on o1.seq+1=o2.seq

join tally on tally.N<= DATEDIFF(day,o1.dateval,isnull(o2.dateval, @maxdt))

order by date