The problem is becuase of a line in web.config in WSS root folder which is:
<tagMapping>
<add tagType="System.Web.UI.WebControls.SqlDataSource, System.Web, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a" mappedTagType="Microsoft.SharePoint.WebControls.SPSqlDataSource, Microsoft.SharePoint, Version=12.0.0.0, Culture=neutral, PublicKeyToken=71e9bce111e9429c" />
</tagMapping>
The solution is as below:
Exception Details: Microsoft.SharePoint.WebPartPages.DataSourceControlDisabledException: This control does not allow connection strings with the following keywords: ‘Integrated Security’, ‘Trusted_Connection’.
I was able to get rid of this by putting my VS 2005 built ASPX pages in a separate virtual directory (running as an application), and editing the web.config for my new application. Add the following section to the <system.web><pages> section:
<tagMapping>
<remove tagType="System.Web.UI.WebControls.SqlDataSource, System.Web, Version=2.0.0.0, Culture=neutral, PublicKeyToken=b03f5f7f11d50a3a" />
</tagMapping>