For those installing SharePoint Portal Server 2003 with SQL 2005, you might find that a default install of SQL05 results in an inability on the part of SharePoint to connect to the database server when creating new databases, including the farm-starting configdb.
Technically, this is by design, since SQL05 starts locked down and you must open it up to work. One tip, if you have a difficult time getting SPS03 to create new databases in SQL05 (and the error message is a connection-oriented error message) is to ensure that you have opened up the Configuration Manager and enabled connections via TCP/IP. I'm thinking Named Pipes also needs to be enabled, but I've not tested that for sure to know.
If you know more about this topic, please post back here. Thanks.
Bill English
Mindsharp