I had an old project that I'd like to run again. So I've installed SQL Server 2008, created a Database. Now the project was in Java and I had to add an ODBC user data source.
Ok now I give it a name, description, I tried leaving the Server blank and tried typing 127.0.0.1 (I just want to run on my PC)
I click next, when I click next again with the check box "Connect to SQL to obtain default settings for the additional configuration options." checked. I get this error
SQL Server Error: 2
[Microsoft][ODBC SQL Server Driver][Shared Memory]ConnectionOpen (Connect()).
SQL Server Error: 17
[Microsoft][ODBC SQL Server Driver][Shared Memory]SQL Server does not exist or access denied.
Find a tutorial on connecting to SQL Server (search for "tutorial connecting SQL Server 2008" or something like that), go through it, take copious notes, and if you still have problems, post your notes in a reply. That will give us more to go on.
Did you install a named instance of SQL Server? Using the loop back address will only attempt a connection to the default instance. If it is not that, I would check to make sure the service is running.