First let's take Crystal Enterprise out of the picture and concentrate on SQL Server.
What version of SQL Server are you using? Is it listed in the platform.txt?
Depending on the version of SQL Server you are using, it comes with three types of security. 1) SQL Server, 2) Mixed or 3) Windows NT.
When you create a database make sure you create a login account as well as a user of the database. Once you have done, assign the user account as the DBO. Assigning with DBO permission allows the user account to have read/write permissions of just that database.
Through the ODBC Administrator, when you add a new system dsn and selected SQL Server driver, in one of dialog boxes, "Which SQL Server do you want to connect to?", a drop-down list of SQL Servers should appear. If none appears then there is a problem with the networking client of SQL Server not working. If some servers appears, the select the correct one.