Looking at the threads, issue seems to be that you have not enabled the remote connections on the SQL 2005, to do this
1. Go to Surface area COnfiguration from Start - Programs - Microsoft SQL 2005 - Configuration Tools - SQL Server Surface Area Configuration
2. Select Surface area configuration for services and connections
3. Select Remote Connections from Database Engine dropdown list and enable 'Local and Remote Connection'
This should work as i see you are unable to telnet to port 1433 to your SQL 2005.
Let me know if this helps