Got a few links that can help.
Make sure that you check the log file in the server’s directory, to find the nature of the error.
this blog gives a brief description of the protocol errors:
http://blogs.msdn.com/sql_protocols/archive/2006/02/21/536201.aspx
if you are not able to connect to the server, follow the steps given in
http://blogs.msdn.com/sql_protocols/archive/2007/05/13/sql-network-interfaces-error-26-error-locating-server-instance-specified.aspx
And if your client is Vista, turn off the firewall.. that will solve the issue, Im trying to find how to enable the firewall and still connect to the DB.
Will update accordingly,
Goood luck

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