Installtion issues with VC (GUI Machine for EP5)

I downloaded the Visual Composer and having issues installing it. I am running Windows XP Ver.2002 SP2 with IIS & MSSQL server running as local host.

When I come up to "SQL Database Server" setup dialog box it asks me to enter:

1) Host Name: <here I have my machine name entered>

2) Default TCP/IP Port: <i enter localhost here>

3) User Name: <i enter here same as my machine name>

4) Password: <i leave this blank>

When i click NEXT button i get the error message which read:

"FAILED TO CONNECT TO DATABASE SERVER. VERIFY CONNECTION DETAILS."

Please could some one give me pointers when 'am I doing wrong and need to different to proceed successfully.

Thanks in advance...