1. does it support code targeted for Smart Devices (WM 2003 SE through WM 5, PPC and Smartphone) with .NET Compact Framework v2?
Yes
2. does it integrate with VS 2005? The trial download does not seem to be.
Yes, spices.net integrates with both (VS 2003 and VS 2005) IDEs.
Choose type of the integration in the process of installing of Spices.Net, Visual Studio Integration package is included into Spices.Net Evaluation.
3. following (2), does it allow building into .CAB smart device target file?
Yes. Also you can use MSBuild integration to create more flexible build scenario or use Spices.Obfuscator engine to create your own c#/Vb.Net script (see the samples included into Spices.Net, \\SDK folder)