Everything is on my local PC which is running Vista Ultimate, using IIS7
I have made a database in SQL called DotNetNuke.
Then I open MS WAI and click to instal DNN.
When it comes to Configuring it and typing in the Database Server Name, Username and password, Admin U/name and P/word, And Database Name, this is what I input: (The field off screen is just confirm password)

I'm not sure about the Admin Username and password so I just used the User ones.
Click next and this error message comes up:
"We are unable to connect to the SQL Database on 'localhost'. Please ensure that it is running and then Re-Check."
I have no idea what this means or how to fix it, I have tryed different Database Server Names on the image above but nothing.
I have searched google the entire morning and only found one thing which just said wrong forum post over somewhere else which is soooo useful.
Please help me I have spent ages trying to get this to work, and is making me go nuts :)
I've tryed installing manually without WAI but that brings an HTTP error 500.19 when i try to go to the install page in my web browser