I was not able to find out, yet, directly from the SQL Server product group whether this is a known bug or that it’s even confirmed to be a bug, but here is what I came across last week…
On SQL 2005 SP1 (other versions not tested), if you set the product name to be “SQL Server”, you may get error messages (see below). However, using “xyz”, or “SQL”, or blank string (can only be done via stored proc in SQL 2005-SP1) it’ll work just fine.
When I configured it to use SQL Server native provider, I got the following error:
OLE DB provider "SQLNCLI" for linked server "TEST1" returned message "Login timeout expired".
OLE DB provider "SQLNCLI" for linked server " TEST1" returned message "An error has occurred while establishing a connection to the server. When connecting to SQL Server 2005, this failure may be caused by the fact that under the default settings SQL Server does not allow remote connections.".
Msg 53, Level 16, State 1, Line 0
Named Pipes Provider: Could not open a connection to SQL Server .
When I used SQLServer OLEDB Provider, the following error was returned
OLE DB provider "SQLNCLI" for linked server "TEST1" returned message "Communication link failure".
Msg 10054, Level 16, State 1, Line 0
TCP Provider: An existing connection was forcibly closed by the remote host.
Msg 18456, Level 14, State 1, Line 0
Login failed for user 'domain\username'.