To connect to MS SQL Server you need to follow the following steps.
Pre-requisite: You need to have a sqljdbc4.jar file placed in the jdev/lib/folder. It can be downloaded from this (1033\sqljdbc_3.0.1301.101_enu.tar.gz) path and extracted to get sqljdbc4.jar. Finally it needs to be at jdev/lib location.
1. Go to New Database Connection and create a Database Connection by providing all the required details. Remember to select SQLServer as Connection Type.
2. In the Library section click Browse and add the Library entry as shown below.
3. Click on Test and it says Success....
However, for the projects using MS SQL Server connection deployed on Weblogic server, some server side configuration also needs to be done that can be found here.