There is a known problem with the SoftGrid installation program that it can not deal with installing the database on to SQL Server when there is a named instance as well as a default instance installed on the server.
IMHO there are a number of down falls with the installation program
During the installation of SoftGrid you are asked to select the SQL Server and select a port number (I’ve never really bothered about port numbers and I’ve been around SQL Server since 6.5 days). In the environment that we were trying to install SoftGrid data to is one box with a SQL Server 2000 installed as the default instance (so this runs as the default port number) and SQL Server 2005 runnning as a named instance which is where we want to install SoftGrid. The SQL 2005 service runs on a port number taken from a pool of dynamic port numbers so without messing around with the service configuration there is no way I can really know what port number SQL is currently running under. The convension is that if you set the port number to 0 then it should tell the client that it needs to find the dynamic port number , but this didn’t work. Blanking out the port number seems to tell the client tool to try to connect using NamedPipes rather than TCP/IP.
The SoftGrid installtion program, I believe, then tries to connect to the server using windows authentication which fails and prompts the user user for a SQL login. According to collegues that have run mutiple installs, it always prompts for the user.
We finally got it working by installing the SQL Server 2005 client connectivity tools on the SoftGrid server and then using the client tools create an alias which points to the named instance we want to installl to. This acts as a proxy so it fools the SoftGrid install in thinking that it standard single instance SQL Server. The Server even appears in the list of available server to connect to. (It still prompts for a SQL login in though)