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)
If all else looks correctly configured then this might be a control using personalization that uses SQLExpress by default. An example of such a control is the WebPartsManager, this control is a wonderful control in ASP.NET 2.0 and allows for the web part behavior on a page but if you enable the personalization in the properties screen (default is enabled) then this control will attempt to use SQLExpress to store its personalization info. This might be fine for some sites but not everyone wants to run SQLExpress in production so I disabled personalization for now until I can figure out how to point personalization to a SQL Instance on another server. I’ll post that as soon as I figure it out, in the meantime if anyone has the answer please fill me in.