Problems upgrading database from 2005 to 2008 R2

I have backed up my databases, uninstalled SQL Server 2005 and installed SQL Server 2008 R2.

Then restored databases into that.

Problem is compatibility level of the databases is still 2005, it won't let me change it to 100 either as a query or in the properties, the highest level available in properties is 90.

I see the server it's connected to is 9.0.5000 which is 2005, so maybe that's why but how on earth can I make the databases version 2008?

I want to do this to take advantage of the 10GB databases limit, as 2005 databases only have a 4GB limit.

Thanks.