I run into a problem where I tried to connect to a fresh installation of SQL Server 2008 and could not do it for no apparent reason. But it turns out that SQL Server 2008 is shipped with TSP/IP disabled and nobody can connect to it via network, even from localhost.
Here is the solution:
http://support.microsoft.com/kb/823938

You can check in registry this key:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Microsoft SQL Server\\MSSQLServer\SuperSocketNetLib\Tcp\Enabled
It must be set to 1 for SQL Server to be listening for network connection.

Run this on master database to see error log on the server:
exec Go Xp_readerrorlog
You should look for
SQL server listening on X.X.X.X: Y
This will be an indicator if network connections are allowed in the Server

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