You can take your SQL 7 databases and detach them from the SQL 7 instance, then move them to the SQL 2005 server, and attach them to the SQL 2005 Instance.
This MS KB will show you how to migrate your logins from one SQL Server to another.
The process it self is fairly easy. However you will want to test your application on SQL 2005 to ensure that everything works as expected in SQL Server 2005. SQL Server 7 directly to SQL 2005 is a very major upgrade.
I would like to add is becareful with Logins in SQL Server from 7 & 2000 to 2005
The major difference is Login password are case sensitive, which was not true in sql server 7 & 2000
Hope this will help.