Is there a program that converts a SQL Server database diagram to er model, or create er model of a database from SQL Server server?
Within SQL Server, there's the "Database Diagram" feature in each database, in Management Studio.
You can create a new diagram from that, and include all (or some) of your tables, so showing where the relationships are, and what the tables are.
Try Microsoft Visio. Visio professional has a reasonably good database reverse engineering feature, and it is easy to retrofit relationships logically present in the data but not physically manifested in the database. It is also easy to make multiple diagrams from the same reverse engineered model (on separate pages in the .vsd file).
These two features make Visio a very useful tool to help understand and document third-party databases, and Visio Pro isn't all that expensive.
However, there is a serious caveat in that it has no facility to generate a SQL file from the schema unless you buy the enterprise architect version, which is only available with EA versions of Visual Studio. As far as I know, there's no EA version of Visio past 2002/2003, so this product is obsolescent.
I've used Erwin for 10 years and it works great! Unfortunately it is a bit pricey. Hopefully someone will come out with a less expensive tool to accomplish this, I've heard Visual Studio 2010 may have some tools in this area.