I could create a new SQL user, but couldn't create an ODBC connection -- kept getting the message "not a trusted SQL user." Found out that I had to go to the server properties, and do the following:
* Open The SQL Server Enterprise Manager
Start menu > Programs > Microsoft SQL Server > Enterprise Manager)
* Expand the tree-control until you can your server
* Right click on the server name and "SQL Server Properties (Configure)" window will open
* Select the Security tab
* For "Authentication", select "SQL Server and Windows"