In the first step of the Database setup wizard, you need to specify the SQL Server and authentication mode used to access the server:
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SQL Server name or IP address - enter the name of the server. You will typically use one of these:
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the name of the server (such as DBSERVER1) or
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the IP address of the server (such as 192.168.1.105) or (local)
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<SERVERNAME>\sqlexpress (if you're using Microsoft SQL Server 2005 Express Edition)
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Use SQL Server account - use this option if your server is configured for mixed mode authentication with SQL logins
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Use integrated Windows authentication (ASP.NET account) - use this option if your server is configured for Windows integrated authentication. In this case, you need to use SQL Server 2005/2008 Management Studio to create a new login for user account under which you currently run the web application (ASPNET for Windows XP and Network Service for 2003 - the actual ASP.NET account name is displayed on the screen).