This is for MSSQL 2008 but I believe this will work at least for 2005 as it is based on the driver's capabilities\

• Install the driver sqljdbc4.jar in [SERVER]\modules\com\microsoft\main
• add under the same directory module.xml with content

{code:xml}
<module xmlns="urn:jboss:module:1.1" name="com.microsoft">
  <resources>
    <resource-root path="sqljdbc4.jar"/>
  </resources>
  <dependencies>
    <module name="javax.api"/>
    <module name="javax.transaction.api"/>
  </dependencies>
</module>
{code}

• add to the <subsystem xmlns="urn:jboss:domain:datasources:1.1"> as follows

{code:xml}<datasources>
                <datasource jndi-name="java:/MSSQLDS" pool-name="MSSQLDS">
                    <connection-url>jdbc:sqlserver://SERVER_NAME:SERVER_PORT;databaseName=DB_NAME</connection-url>
                    <driver>sqlserver2008</driver>
                    <security>
                      <user-name>USERNAME</user-name>
                      <password>PASSWORD</password>
                    </security>
                    <pool>
                        <min-pool-size>5</min-pool-size>
                        <max-pool-size>50</max-pool-size>
                        <prefill>false</prefill>
                        <use-strict-min>false</use-strict-min>
                        <flush-strategy>FailingConnectionOnly</flush-strategy>
                    </pool>                    
                    <validation>
                      <valid-connection-checker class-name="org.jboss.jca.adapters.jdbc.extensions.mssql.MSSQLValidConnectionChecker"></valid-connection-checker>
                    </validation>
                  </datasource>                  
                  <drivers>                  
                    <driver name="sqlserver2008" module="com.microsoft">
                        <driver-class>com.microsoft.sqlserver.jdbc.SQLServerDriver</driver-class>
                    </driver>                    
                 </drivers>
            </datasources>
{code}