Server. The hostname or IP address of the machine on which the SQL Server server resides. Specify localhost or (local) if the server is on your own PC.
Authentication. This window allows you specify whether you connect to SQL Server specifying a userid/password, or for SQL Server to automatically use your LAN identity. The latter option (Windows NT authentication) appears only to work if your PC is part of a Domain. If you are using a Workgroup, this option will not work.
Client Settings. In most cases you will not have to change these. If your SQL Server server is using a port other than the default (1433) you will need to change it here.
Change the default database to. Use this option if you wish to specify the database to connect to. If not specified, you will be connected to the database which is defined as your default database.
Other options. The remainder of the options should not be changed from the default values
It is recommended that you click on Test Data Source to test that your connection has been configured correctly.