So...I read that completely wrong, which is a bad thing on my part.

I have can now connect using select * from server2.master.dbo.sysobjects from Server1 to Server2 and from Server2...

I forgot to make a post saying I fixed my Data Access issue by going into the Linked Server properties and change Data Access from false to true.

I will run...

So I have double checked my MSDTC on both SQL Server 2005 and turned everything on just for now. I also found out running that sql query you have provided...