I am having the same problem, and it started when I changed JDBC drivers from SQL Server 2005 v1.1 to SQL Server 2000 SP3.
I had to change to the 2000 SP3 driver, because we are using Crystal Reports which requires it, and throws NullPointerExceptions when we use the 2005 driver.
If you can, change to the SQL Server 2005 v1.1 driver (compatible with 2000 and 2005 server) located on Microsoft's web site at
http://www.microsoft.com/downloads/details.aspx?FamilyID=6d483869-816a-44cb-9787-a866235efc7c&DisplayLang=en
The driver class and url must be changed...
driver class: com.microsoft.sqlserver.jdbc.SQLServerDriver
url: jdbc:sqlserver://host:port