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1. Check to make sure 'SQL Server Browser' is running within your services
2. Go to Start > Programs > SQL Server > Configuration Tools > SQL Server Configuration Manager. Expand SQL Server Network Configuration > Protocols for MSSQLSERVER. Check to make sure Named Pipes and TCP/IP are both enabled. Check the same for SQL Server Native Client Configuration within the Configuration Manager.
3. By default, SQL Server communicates through port 1433. Do you have this port open within your Firewall (if there is one)?