How to do an in-place upgrade of SQL Server 2005 Express to SQL Server 2008 R2 Express
You have a 32-bit instance of SQL Server 2005 and are trying to upgrade to a 64-bit instance of a newer version. This is not supported; you can check any of the upgrade documents about this, e.g. http://msdn.microsoft.com/en-us/library/ms143393(v=sql.105).aspx:


  Cross-platform upgrade is not supported. You cannot upgrade a 32-bit instance of SQL Server to native 64-bit.


It says stuff about WOW64 but my recommendation for your scenario is to install a separate 2008 R2 instance, backup/restore your databases from the 2005 instance (and transfer jobs/logins), then remove that instance. You will need to choose a different instance name or use a default instance.