You can rebuild system databases in Sql 2005 and specify the collation as well using the below command,

start /wait CD or DVD Drive\setup.exe /qn INSTANCENAME=MSSQLSERVER REINSTALL=SQL_Engine REBUILDDATABASE=1 SAPWD=NewStrongPassword SQLCOLLATION=NewSystemCollation

But before proceeding with that you need to script all the logins, jobs, take a backup of all your dts packages and to be on the safer side take a full backup of all the user databases as well. After rebuilding check the collation of the system databases and see if they are as desired. Then run the scripts to recreate all the logins, jobs etc..