The prerequisties installed are:
1) MS SQL Server 2005 - only required components installed
3) Dot Net Framework 5
I am unable to connect to SQL Server through SQL Authentication. Is it compulsory to install SQL Server for installation of EPiServer CMS5? Is it possible with oracle? I am well versed with Oracle than SQL Server.
It is not possible to install EPiServer CMS 5 with Oracle as Database yet so you'll have to use SQL server.
How are you installing EPiServer? Are you using the Manager? What kind of error are you receiving?
You can use SQL Express as well - this blog post might help:
Installing EPiServer on SQL
Note that the EPiServer manager might use Windows auth for the install of the database - not sure about that with the new manager. Can we get an EPiServer post about it? :)