I have had to adjust the settings for SQL Server to allow also SQL Server authentication. I also set the password for the sa user account. Same as the password I will use for all accounts. I also neede to enable the account.
The next issue I ran into was that it need MSXML 4 installed, which was quickly solved by downloading it from Microsofts site and installing it. I also managed to install the VMWare tools, finally. They were unavailable when I started this project but not I got them, not sure what they will improve but it feels better to have them in place.
When I ran the database manager tool, I installed all types of databases using all default settings. As password I kept on using Tridion2011. I am getting fast at typing that on my gaming keyboard. 🙂