I have verified the SQL settings and they all check out.
I have installed the BB Manager on my workstation this morning and I am able to connect to the database via SA login. I tested SA login on the BB Server and I was still getting the "unable to connect to database" message.
I have also verified that the regional settings are English.
So now I have two issues:
1.) unable to connect to database from the same server (BES/SQL on the same box) when launching the BB Manager
2.) From my workstation using SA login I can log into the BB Manager... I add the e-mail accounts from the exchange global address book and then attempt to wirelessly activate a Blackberry 7290 and have also tested using the wired approach. The blackberry server just says "initializing". The e-mail gets sent to the exchange mailbox but it then does not send out to the blackberry.