Tim,

Does the portal completely fail to load or just portions?

A couple of troubleshooting thoughts:

Try setting up an ODBC connection on the webserver connecting to the new SQL Server box(es).  If this works, then it is either the web.config or an incompatibility with DNN3 and SQL Server 2005+.

Assuming this works, try downloading the latest version of DNN and installing it on the webserver as a new website.  Use the new SQL server box(es) as the target database server.  Once you get the new version of DNN installed correctly, copy the connection string out of there and try it on the DNN3 installation - I understand that the 2 connection strings are in different locations and are stored differently due to differences between the .NET 1.1 and .NET 2.0 architectures, but my understanding is that this should still work.  Make sure you make appropriate changes to your Conn String for the .NET 1.1 database.

If you're still not up and running, then start looking at functions/features that were dropped between SQL Server 2000 and 2005.

Believe it or not, that may be good news.  I think you have one of these problems:

1. You need to add the appropriate usernames and passwords from the existing SQL Server into the new SQL Server.  I assume that this is actually the first thing you tried, but it doesn't hurt to check twice.
    
2. TCP/IP is not enabled on the new SQL Server box(es) and needs to be enabled.  Starting with SQL Server 2005, TCP/IP connections are no longer enabled by default.  You need to run the SQL Server Configuration Manager and enable TCP/IP connections.
    
3. You may need an updated SQL Server native client. Search the page for SQL Server native client - it's about 1/3 of the way down.