Creating an ODBC new DSN fails

From: Colin Bate (ColinBate_at_discussions.microsoft.com)
Date: 09/20/04 

Date: Mon, 20 Sep 2004 08:51:03 -0700

I am not able to create a new DSN to a SQL MSDE 2000 SQL server, I get the
message:-
Connection failed
SQLState '01000'
SQL server error 11001
[Microsoft][ODBC SQL Server driver]TCP/IP sockets]ConnectionOpen()).
'Connection failed'
SQLState '08001'
SQL Server error: 6
[Microsoft][ODBC SQL Server driver]TCP/IP sockets]SQL Server not found.

I have two PC's both giving this error and both have existing System DSN's
that work fine, I just can't add a new one with out getting hte above error
when selecting the Next button on the second pageof the wizard.
Interestingly I deleted the existing DSN which was working and I can't
create a new one to this database. The database is on 'local' and I'm using
Windows NY Authentication and all parameters at the default value.
One PC is an XP SP2 box the other a Win2K server with SP4.

Any ideas what the hell has gone wrong?
Many thanks, Colin