I just started using the 04.04.02 starter kit and since I do not have SQL Server Express Installed I went through the steps to create anew database for my application in SQL Server 2005 Developer Edition instead.  This is a blank database with all the user information working properly when logging in via SQL Server Management Studio.  I can use both the SA and the new account I created for this application.  I made all the changes noted in the setup guide pdf that came with the product and also read through all the threads on this forum with no luck.  In the connection string I have tried the following servers: <localmachinednsname>, localhost, ., <localmachinednsname>/localhost, <localmachinednsname>/<localmachinednsname>, <localmachinednsname>/. and so on and so forth.  Now when I go to compile the application I get the following error when I have already modified the Surface Area setting of SQL Server to allow both TCP/IP and named pipes.

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: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)

Other valid information...I am using Windows Vista Ultimate and IIS 7.0 (with the entire IIS 6 Management Compatability features setup) and when I opened the solution for the first time I had it run with the original .NET 2.0 achitecture without upgrading it to 3.5 or any other version of the framework. 

Any suggestions for a newbie???  Thanks in advance for any help you can give!

I tried using both the default instance name .\MSSQLSERVER and also (local) for the instance.  Neither worked still. 

When you say the install wizard you mean to use the full install instead of just the .vsi starter kit right?  If so, I will try that next since I have only been working with the starter kit as of thus far.

Thanks for your help.