Well, after reading this thread it looks like you also need to make sure that the "BUILTIN\Administrators" group has a login to SQL Server and make sure it is included in the sysadmin role. I guess this assumes you need to configure your SQL Server for mixed authentication mode.
I double checked both SQL Server network utilities and this is the way mine are set up:
SQL Server Client Network Utility:
--Enabled protocols: TCP/IP, Named Pipes (in that order)
--Alias tab: (none defined)
SQL Server Network Utility:
Enabled protocols: Named Pipes, TCP/IP
--Mr. SQL Guy