Good Grief, the SQL Server Authentication mode wasn't on. I set it to both 
Windows and SQL Server and the DSN works just fine. Thanks much Mike.  Also, I 
know using remote server will impact our application performance but the 
dataset is going to be relatively small and over a T1.

Thanks to you both.

Dave


 
>Dave,
>Can you set up the exact same login on the local SQL 2005 server to
>see if that works?
>Is your password longer than 16 characters? Sometimes that is a problem.
>In your SQL Server 2008 I am assuming that you enabled TCP
>connections, specified a target port number, and turned on the SQL
>Server authentication mode in the security settings.
>
>-Mike Chabot
>
>On Thu, Oct 1, 2009 at 1:13 PM, David Koehler
><[email protected]> wrote:
>> 

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