If I don't care about less than seconds, what should be the recommended type to store my datetime values in sql-server 2005, is it datetime or smalldatetime or else?
smalldatetime has a resolution down to one minute, so if that resoulution is OK for you, smalldatetime is 50% smaller (4 bytes vs. 8 bytes) so is preferred.
See http://karaszi.com/the-ultimate-guide-to-the-datetime-datatypes for a good overview.