Вообще-то уважаемый BOL говорит:

To change the default collation for an instance of Microsoft® SQL Server™ 2000 you must:
Make sure you have all of the information or scripts needed to re-create your user databases and all of the objects in them.
1.Export all of your data using a tool such as bulk copy.
2.Drop all of the user databases.
3.Rebuild the master database specifying the new collation.
4.Create all of the databases and all of the objects in them.
5.Import all of your data.
Note: Instead of changing the default collation of an instance of SQL Server 2000, you can specify a default collation for each new database you create.

но п.3 (то бишь rebuild) занимает столько времени, что "дешевле" будет переустановить сервер...