Microsoft SQL Server 2005 is still the primary version targeted, although everything we generate for SQL Server 2005 should also work with SQL Server 2008.
We will add support for some of the new SQL Server 2008 features (in particular, the new temporal data types) in the relatively near future. When we do this, the user will be able to choose SQL Server 2005 or SQL Server 2008 as the generation target (as opposed to the current version, where the only choice is SQL Server).