Hi Stevie,
From your Development machine, are you able to connect to the SQL Server database with SQL Server Management Studio?
When you configure your ODBC datasource in the ODBC Administrator, does the Test Connection work? You must be using the 32 Bit ODBC Administrator for Crystal.
Can you also verify the version of Crystal Reports you are using? Are you using 2008 or Crystal for VS2010?
I have had problems if you have the same datasource in both 32 and 64 bit ODBC. ODBC gets confused and doesn't know which one to open.
I checked our database server and we have NamedPipes as a protocol for SQL Server disabled. That's our configuration though so I would recommend you talk to your DBA before making any changes to the SQL Server configuration.
Good luck,
Brian