Identifying an orthogonal matrix is fairly easy: a matrix is orthogonal if and only if its columns (or equivalently, rows) form an orthonormal basis. A set of vectors $\{v_1, \ldots, v_n\}$ is said to be an orthonormal basis if $v_i \cdot v_i = 1$ for all $i$ and $v_i \cdot v_j = 0$ for all $i \neq j$.
(If you want to see why this is true, think about what it means to say that $P^TP = I$ in terms of the columns of $P$.)
We can check this for the matrix $P$ you gave: $$P = \begin{pmatrix} \sqrt{3}/2 & 1/2 \\ -1/2 & \sqrt{3}/2 \end{pmatrix}$$ We have two columns: $$e_1 = {\sqrt{3}/2 \choose -1/2} \quad e_2 = {1/2 \choose \sqrt{3}/2}$$ with $e_1 \cdot e_1 = 3/4 + 1/4 = 1$, $e_2 \cdot e_2 = 1$ and $e_1 \cdot e_2 = \sqrt{3}/4 - \sqrt{3}/4 = 0$, so $P$ is indeed orthogonal.
Of course, another way of checking is just to multiply $P^T$ by $P$ and see if you get $I$!
In the context of the question, how would you go about solving it? If you write out in full what it's asking you to do, you see it's asking you to compute $P^T(PAP^T)^{2005}P$, which is a bit terrifying. But it's hoping that you'll notice that if you start expanding this out you get $P^TPAP^TPAP^TPA\ldots P^TP$.
It's normally reasonable to assume that the people who set exams aren't completely evil, and that they expect you to solve the question, and that multiplying out all these matrices is an unreasonable expectation in the time you're given. So we notice that $P^TPA$ occurs again and again, and we might hope that it's something nice.
When you multiply $P^TPA$ out, you get $A$ itself back! (Because $P$ is orthogonal, as we just showed.) So the question reduces to calculating $A^{2005}$. This still seems a little unreasonable to do directly, so we are missing another trick. If we start working out $A, A^2, A^3, \ldots$ we notice that $$A^n = \begin{pmatrix} 1 & n \\ 0 & 1 \end{pmatrix}$$ This is straightforward to prove using induction, but from the looks of the question it's just a multiple choice so don't need to.