If you are working with SQL Server 2005 and used the "SQL Server Surface Area Configuration" Tool ...

Start >> All Programs >> Microsoft SQL Server 2005 >> Configuration Tools >> SQL Server Surface Area Configuration >> Surface Area Configuration for Services and Connections >> Remote Connections >> (default is: Local connections only)

... and make any changes, it will give a warning window that states that you will have to restart the SQL Server Service for changes to take effect. In my experience, restarting the SQL Server service has not worked. I have had to reboot the server for those changes to allow remote connections to that instance.

Note that Remote Connections are DISABLED by default, for SQL Server 2005.

Hope This Helps