Also, is SQL local or remote? What version of SQL (Express, 2000 or 2005)? If it is a remote SQL Express instance that you created, you will need to do the following of the SQL Express computer:
Go to Start | Programs | Microsoft SQL Server 2005 | Configuration Tools | Microsoft SQL Surface Area Configuration | Surface Area Configuration for Services and Connections.
Select Remote Connections under the Instance and select "Local and Remote Connections. Select TCP/IP if using Backup Exec, select Named Pipes for the Desktop and Laptop Option (DLO) or select TCP/IP and Named Pipes if using Backuo Exec and DLO.