SQL Server does not exist or access denied

I am running SQL server as a standalone on my PC on Windows XP Pro.

I have am accounting program and Crystal reports accessing my databases without a problem.

I have recently loaded a new program, created a system DSN, virtual directory in IIS.

When I try to run the program I get "SQL Server does not exist or access denied."

The server is running when I get this message.

Your help would be appreciated.

Thanks in advance.