I m a new bee i have used sql server 2000 before my question is when creating two tables in sql server 2000 say location and projects table projects having a foreign key referen
From what I can see in the example, you haven't inserted anything in the projects table in which to have a cascaded update or delete performed.
I would suggest as a better example to demonstrate the behaviour you're after that you perform the following, after doing the steps above:
insert into projects values (1,1);
select * from projects;
update location set id = 2 where id = 1;
select * from projects;
What you should end up seeing, is that initially the location_id in the inserted projects row will be equal to 1, then after the update of location, the location_id in projects should change to 2. This demonstrates that the change to the id of the location table has cascaded to update the location_id field of the row in the projects table.