Well I believe there is a migration path for SQL. Since it's a physical server, you can simply install SQL 2005 SP2 and do an inplace upgrade of the engine. That would work. If it doesn't upgrade, then your only option is to:
1) dump the data from the current VI database (or do a backup of data only)
2) stop the VC service.
3) install SQL 2005 on that DB server machine, and install SP2, firmware updates, etc.. make sure it's fully patched.
4) uninstall VC and then reinstall (telling the installation that you want to create a NEW DB instance and let it create the DB, and the NEW DB will be blank)
5) import the data from step 1 into the newly created DB. (This is because the schema is different, and you want to just populate the data).
6) start the VC service and verify your cluster / VM's are working. Everything should be good, although you may have to reconnect some machines.
With SQL it's a good idea to start with a fresh DB (schema) and import the data back. That should get you where you need to be.
Just make sure you backup everything, keep your license keys, configurations, etc.. just in case.
