I found this posted elsewhere (thx PaulGR, Yorkshire, England), after much searching and frustration.

My environent in XP SP2, SQL Server 2008m installed on my local box.

I got the "target machine actively refuses..." when I tried to connect to AS on my local machine. This solved it:

"After much trial and error I finally got this to work. Unfortunately, I'm not exactly sure why. I simply changed the SQL browser to run under the local system account. I think I'll have to watch Scott's videeos on service accounts again."

DanO