There are probably multiple issues here since you're going from an older to a newer operating system. The first thing to do is go to Program Files\Palm\YourUsername\Backup. Rename the backup folder to Backup_Old.
Next uninstall the current Palm desktop and reinstall from the T5 CD. Make sure that you you either keep your third party conduits, if you were using Pocket Mirror, or choose the Palm Outlook conduits. Do not choose the option to sync with the Palm Desktop.
Once the reinstall is complete, hotsync again, choosing your existing user name. This hotsync should work with Outlook and restore all your Outlook data but nothing else.
You would now have to go to the Backup_Old folder and reinstall the programs you had previously. Install each one separately, test run the program, and sync before installing the next one. You may find that some programs are not compatible with the T5 or need to be updated and it may require a hard reset to get out of an endless loop. That's why it's important to hotsync after each install, so you don't lose all the work you've done. If you had hacks on your 505, Do not install either a hack manager or any of the hacks. The hack manager and many of the hacks won't work with the T5. There are ways to get some hacks to work but it's best to save that for later when you get your important programs up and running again.