The process is fairly straightforward. Build your front end with your client as a spreadsheet and add a submit or update button. In the click event handler, retrieve the contents of the range object in the spreadsheet and build a query. The book, Professional VSTO 2005, contains sample code to show you how to retrieve data from the range object.
As far as binding directly to the database, VSTO doesn't currently support this.
>Can VSTO 2005 use ADO.NET?
ADO.NET is platform agnostic. Any managed code, to include VSTO can access the ADO.NET layer.