Hi Joe,
If you have the data on a machine that is different than the machine you have ArcGIS Server on (and you don't want to create a domain account for the ArcGISSOC user) you will need to create an ArcGISSOC account on the machine containing the data. The username and password must be exactly the same as the ArcGISSOC account on the machine with ArcGIS Server. You will then need to explicitly give the ArcGISSOC account permissions to the folder with the data. The Everyone user will not work, as the ArcGISSOC account needs explicit permissions.
Patrick