SQL Packager should try to create a package which can be built on SQL Server 2000 if you target a SQL Server 2000 database (with 'upgrade a previous database') when building the package. However, it can't generate the correct script in the following cases:
1) You have stored procedures / views / functions with syntax which will not work on 2000
2) You have any 2005-only features in your database (the new object types, data types etc)
There are also a variety of other minor issues which might stop a 'downgrade' package working properly (e.g. there are some issues around full text catalogues, and around owners of objects).