Bharath,
The LabVIEW Simulation 8.2 is a Module, which means that it can only work with the version that was created for. In this case, it only work on LabVIEW 8.2.
In the 8.5, we joint the Control Design Toolkit with the Simulation Module creating the LV Control Design and Simulation Module. So, if you need to use Simulation in 8.5, you need to have this module. If you have SSP, you should've have received this update. If you don't have, please contact your sales representative for more options.
I hope this helps.
Barp - Control, Simulation, RTT and HIL - National Instruments