SQL Configuration Error

When i open up configuration area i click Surface Area Configuration for Features, a few seconds later i get the message:




Code Snippet
TITLE: Surface Area Configuration
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Failed to connect to server localhostMICROSOFT##SSEE. (Microsoft.SqlServer.ConnectionInfo)
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ADDITIONAL INFORMATION:
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. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified) (Microsoft SQL Server, Error: -1)
For help, click: http://go.microsoft.com/fwlink?ProdName=Microsoft+SQL+Server&EvtSrc=MSSQLServer&EvtID=-1&LinkId=20476
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BUTTONS:
OK
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Since i was trying to set this up for development purposes i opened the Local TCP ports and configured the firewall to allow SQL traffic through. I went to my application and it successfully connected to the database. So it leaves me wondering if this error i have would make any difference later - can anyone advise how to resolve?

So far i have allowed local remote connections via TCP, ive adjusted the firewall accordingly (which allows other computers to connect to the server and retrieve database information). Im running Windows Server 2008 with SQL 2005 64 bit edition.

Thanks