When installing a workstation you are presented with a database configuration window that must be filled in correctly before you can continue. You can find basic setup information in KB article T0218, you generally only need to input your server name. If this information is not corect, or your server is not configured correctly then you will receive an error stating "Test Connection Failed." You can follow the instructions below to troubleshoot.
1. Make sure that all software firewalls are off on both the server and workstation, or verify that they are not blocking the ports necessary for communication with SQL Server.
2. Verify that the two computers are on the same network and that name resolution is working.
If you use file shares, try browsing files on the server from the workstation using the \\ServerName\Share format. If you're familiar with the Windows Command Prompt, try to ping the server from the workstation by name and make sure it resolves to the correct IP address and responds.
3. Make sure that your SQL Server Browser is running on your server. You can do this by opening Administrative Tools | Services and ensuring that it says 'Started' next to SQL Server Browser.