Failed to get the list of available databases, check your database credentials.
In this case customer is trying to use a Remote SQL Server 2005 or SQL Server 2005 Express (Case 1).
Sometimes you may also get the same error when your SQL Server 2005 is local to the Notification Server (Case 2).
As well, when you access the Microsoft SQL Server Management Studio from the actual SQL Server, you are able to access the available databases without problems. However, when trying to access the Microsoft SQL Server Management Studio from a remote machine, in this case the Notification Server, you may see an error message like this one:
Cannot connect to SQLServer\Instance
A connection was successfully established with the server, but then an error occurred during the pre-login handshake. 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: Named Pipes Provider, error: 0 - No process is on the other end of the pipe.) (Microsoft SQL Server, Error: 233)
The SQL Server client cannot connect to the server. This error could occur because the server is not configured to accept remote connections.
6.1.9 Install Wizard failing to automatically detect locally installed SQL Server 2005
The Notification Server Install Wizard will fail to detect a locally installed SQL Server 2005 when "localhost" is entered as the SQL Server name and the following error is returned: Failed to get the list of available databases, check your database credentials.
However, if you enter the computer name as the SQL Server name, the list of available databases for the local SQL 2005 Server will load without issue."
Notification Server 6.0.6074 SP3
Microsoft SQL Server 2005
Microsoft SQL Server 2005 Express