A critical error has occurred.
An error has occurred while establishing a connection to the server. When connecting to SQL Server 2005, this failure may be caused by the fact that under the default settings SQL Server does not allow remote connections. (provider: Named Pipes Provider, error: 40 - Could not open a connection to SQL Server)

I tried other modules and they seem to be ok. However, the forum module seems to be having the above issue.

I had the very same error, and I already had that string in my config file configured correctly.

I tried the install by uploading forum module directly, I tryed the install by FTPing the package to my site in the install folder and then selecting it as the new component to be installed - no matter what I did I got the same error every time.

Finally I asked my hosting provider for advice. He investigated the issue and said that my particular DNN for some unknown reason had very short timeout value. He adviced me to attempt installation on my home computer.

So I did as I was advised. I copied my DNN on my home computer. Luckily it's rather powerfull (I have much more powerfull computers at work but it didn't had to come to that:). I was able to install forum module with success (though after the moment I hit the install link the computer was rather busy with something for about a minute). Then all I had to do was to backup the database at my home computer and restore it at the hoster's MS SQL server.