The Olympus DS-5000 recorders record in .ds2 format. Can they also record in .dss format?

Yes, the DS-5000 recorders can be configured to record in .dss format.  This must configured through the DSS Player Pro software.  Select "Tools | Options" from the DSS Player software, then click the "Device" button.  Click the "Recording" option under Administrative Settings.  There you will see an option for "DSS Classic" or "DSS Pro" format.  Select the "DSS Classic" format, and click "Apply" to apply the changes.  The update the changes by selecting the "Update -> Only this Page" button from the button bar.  This will configure the recorder for .dss format.