How to create a CLR DLL for Sql Server 2005? Is it just any .net class
library that you can load into Sql Server 2005 or is there some special
project type that I need to start with?

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See the following chapter in Books Online:
http://msdn2.microsoft.com/en-us/library/ms131046.aspx
or:
ms-help://MS.SQLCC.v9/MS.SQLSVR.v9.en/denet9/html/ce34132c-bfa3-447b-913
1-b6e17c672efe.htm

If you are using a non-Express edition of Visual Studio 2005 (or
later), it is recommended to use the "SQL Server Project" project type,
because it adds all the required namespaces, creates templates for new
CLR objects and registers the objects automatically.

You probably can build a DLL for use with SQL Server also when using
the "Class Library" project, but you cannot just add any class library
in SQL, because the classes need to be designed especially for SQL
Server.

--
Razvan Socol