I have a SSIS package built in Business Intellegience Development Studio which have both source and destination database specified. Now I want to use some variables to param
You need to define "expressions" in the connection manager which then substitute into server/database.
You can't use variables directly quite often in SSIS
See "Using Variables in Packages" whcih links to Using Property Expressions in Packages.
And after a quick Bingle: http://sqlrs.blogspot.com/2006/03/using-expression-variables-in-ssis.html