I have installed SQL Server and Management Studio on new machine and facing issues while connecting to SQL Server through remote machines on my local area network. After thorough searching and experimenting I have got resolved the error. Following are the steps(not necessary all) to resolve the issue.
TCP/IP's state should be Enabled. (can be Enabled/Disabled by right click on Protocol Name)
SQL Server should be running
Go to All Programs > Microsoft SQL Server 2005 > Configuration Tools > SQL Server Configuration Manager. Select node SQL Server 2005 Services, under SQL Server Configuration Manager parent node. SQL Server's state should be Running. SQL Server Browser service should also be Running (you can Start/Stop by right click on service name)Enable TCP/IP in SQL Server Configuration
Go to All Programs > Microsoft SQL Server 2005 > Configuration Tools > SQL Server Configuration Manager. Select node Protocols for SQLServer(your server's instance name) , under SQL Server 2005 Network Configuration.TCP/IP's state should be Enabled. (can be Enabled/Disabled by right click on Protocol Name)
App Exception for SQL Server TCP Port in Windows Firewall
Go to Conctrol Panel > Windows Firewall > Exceptions (tab). Click button Add Port, enter name and port number 1433. Make sure your entered name is displaying in Programs and Services section, and should be checked while pressing OK button on the tab.App Exception for sqlbrowser.exe in Windows Firewall
In Firewall window > Exceptions tab, click on Add Program. Locate the sqlbrowser.exe by Browse button. Click OK. At my system, it is located at C:\Program Files\Microsoft SQL Server\90\Shared\sqlbrowser.exe.App Exception for sqlservr.exe in Windows Firewall
Similarly add sqlservr.exe in Firewall Exceptions. At my system, it is located at C:\Program Files\Microsoft SQL Server\MSSQL.1\MSSQL\Binn\sqlservr.exe.Enable Remote Connection
Right click on SQL Server main node in Management Studio, and go to Properties. Select Connections page from Select a Page section. Allow remote connections to this server should be checked.References
- http://blog.sqlauthority.com/2009/05/21/sql-server-fix-error-provider-named-pipes-provider-error-40-could-not-open-a-connection-to-sql-server-microsoft-sql-server-error/
- http://msdn.microsoft.com/en-us/library/cc646023.aspx

Well, it is possible that your server machine is accessible, but "Remote Access" from SQL server may not have been enabled. Did you try configuring remote access via SQL Server configuration manager?
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Sure, the section labeled "Enable TCP/IP in SQL Server Configuration" also points the same. (It seems these both options are same and provided on different UIs for easier usability.)
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