Yes MS SQL is definately supported by Joomla 2.5, please refer tohttp://www.joomla.org/announcements/rel ... eased.html
I've had a look at the source code, and I can see that in /installation/models/forms/database.xml, the type for that field is databaseconnection
<field name="db_type" type="databaseconnection"
This appears to be populating the list of database types using the code in
and this code checks to see which database types are supported by your webserver, and only shows you the ones that will work.
I did a test and disabled in my php.ini
Then I restarted apache and I can now only see mysqli and mysql. I also note that in step 2, the database support shows
as opposed to what I saw before
(mysql, mysqli, sqlazure, sqlsrv)
So basically, if you don't see sqlsrv in the list, then I'd say that your php.ini is not configured correctly to load the sql [drive]. Although it would be possible to hack the above and force sqlsrv in the list, if your php is not configured correctly, it's not going to work anyway, as it wont be able to find your database and it will just fail on the next step of the installation.
In my case I had to download a new sql [drive] as the one included in xampp did not work for me. There are several available so you need to load the correct one for your server, which will depend on your php version and whether you need the thread safe version or not. If you google "How to install SQL Server [drive] for PHP", you should find some tutorials that will show you how to set it up and where to download the [drive] from. Essentially you just download the correct dll file and copy it into C:\xampp\php\ext, then adjust your php.ini to load it.