I am completely new to SQL 2005 & StrataFrame as well.

I created a DB connection successfully in teh DataBAse Connection option of StrateFrame but when i try to open Business Object Mapper it gives me the following error. I am using a SQL 2005 - 8.0.2039.

also, please find below the snapshot of the connection created.

An error has occurred while establishing a connection to the server.  When connecting to SQL Server 2005, this failure may be caused by the fact that under the default settings SQL Server does not allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance

As for your issue it can only be one of two things.  First, it sounds like your SQL Server instance cannot be contacted for some reason.  Secondly, make sure that you StrataFrame connection is pointing to the StrataFrame database.  This is a common mistake which will cause issues as well.  See the image below for the database name.

If you have the StrataFrame database selected, make sure that you server is pointing to the connection with the StrataFrame database within it.