You have the wrong URL.
I don't know what you mean by "JDBC 2005". When I looked on the microsoft site, I found something called the Microsoft SQL Server JDBC Driver 2.0. You're going to want that one - it includes lots of fixes and some perf improvements. [edit: you're probably going to want the latest driver. As of March 2012, the latest JDBC driver from Microsoft is JDBC 4.0]
Check the release notes. For this driver, you want:
URL: jdbc:sqlserver://server:port;DatabaseName=dbname
Class name: com.microsoft.sqlserver.jdbc.SQLServerDriver
It seems you have the class name correct, but the URL wrong.
Microsoft changed the class name and the URL after its initial release of a JDBC driver. The URL you are using goes with the original JDBC driver from Microsoft, the one MS calls the "SQL Server 2000 version". But that driver uses a different classname.
For all subsequent drivers, the URL changed to the form I have here.
This is in the release notes for the JDBC driver.
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