A little bit more info ...
You have to make sure the there is at least one protocol allowed in the 'SQL
Server Network Utility'; if it is not allowed server will refuse all
connections.
You can also reference:
http://support.microsoft.com/kb/328306, this article
lists some other causes for getting that message.
--
Mohit K. Gupta
B.Sc. CS, Minor Japanese
MCTS: SQL Server 2005