No validation toolkit is not compatible with Dreamweaver CS5.
It has been replaced by the CSS Form Builder or Form Toolkit extensions
CSS Form Builder contains all of the functionality of Validation Toolkit, Universal Email, Digital File Pro and HTML Editor 2. There is a wizard to use for building your forms.
Form Toolkit includes the functionality of Validation toolkit, and adds Captcha and a Date picker capabilities. use this if you prefer to build your forms yourself and add validation to them.