Just in case someone finds this on a search.
Changed from Windows to SQL Authentication (MSDE) without an issue.
The following technotes helped: http://support.microsoft.com/default...N-US%3BQ325022
Article Number: KB-01641
Article Number: KB-02407
We can now run the Manager on PC's not authenticated to any domain regardless of their windows login. [As long as they use an SQL user account]