check forthe followings :
Make sure your database engine is configured to accept remote connections
• Start > All Programs > SQL Server 2005 > Configuration Tools > SQL Server Surface Area Configuration • Click on Surface Area Configuration for Services and Connections • Select the instance that is having a problem > Database Engine > Remote Connections • Enable local and remote connections • Restart instance
• If you are not using a domain account as a service account (for example if you are using NETWORK SERVICE), you may want to switch this first before proceeding
• Usually the format needed to specify the database server is machinename\instancename • Check your connection string as well