Thanks guys!
I appreciate taking you time for answering my queries.
We did lots of research to find the solution and worked through weekend to test the prototype for migration and I am happy to tell you that we are almost done with finalizing the strategy of our migration even though it might be premature.
you can call our app medium/huge(may be) because of many user input screens used by customer care dept. in health industry for all kinds of queries. Mostly it saves the data directly in database without complex validation and business logic involved.
We used DudeLabs "RC Converter" [
http://www.dudelabs.com/Products.aspx ] to convert all our MFC User Interface into windows form resources which saved many days of work and we could do the prototype test so soon.
We are trying to use Visual Studio 2005 smart client concept because of distributed data sources but we have not yet decided on synchronization of data in case of disconnected datasource.
Because our UI is done we are far ahead of our estimated schedule, we hope we will fix our technical issues soon.
One important thing to share with people struggling with datagrid in VS 2003 -- DataGridView in 2005 is really great as compared to DataGrid in Visual Studio.NET 2003 so if you can switch to 2005 please go ahead because you will have better experience and more fun.
I am C# / C++ programmer but we are using C# and VB.NET both in our development strategy because our old application used MFC mostly for UI purpose and it is easy to translate UI logic in C# as well as in VB.NET.
But be careful if your product uses MFC heavily with complex MFC concepts because in that case prefer C# as others suggested too.
Once again thanks for your suggestions and will bother you once again if I hit roadblocks in my migration path.