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On new installs of Windows 7, we cannot connect to SQL 2008 instances--even by just IP addresss--without opening the firewall port 1433 and adding a hosts file.

The firewall port is obvious, but why does it only connect after adding a hosts entry for the SQL Server?

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Can the windows server ping the SQL box by name? i'm guessing not.

Sounds like a DNS (or firewall between DNS) issue.

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(I updated the problem description) Before adding the hosts entry, we can't even connect by IP address. – user15336 Dec 30 '09 at 16:10
I agree with it being a DNS problem. Perhaps you have an old DNS entry pointing to that IP that the host file circumvents. – Sean Howat Dec 30 '09 at 16:12
Does SQL Server perform name resolution/validation every time you connect? Why can't I connect with just IP address? – user15336 Dec 30 '09 at 16:13
hrm. without the host entry, the output of tracepath sql-server (via its IP), and nslookup sql-server might be interesting. – BuildTheRobots Dec 30 '09 at 16:20
We do not have DNS entries for these servers. Also, it seems to only happen with named instances. – user15336 Dec 30 '09 at 16:24

You are only experiencing the issue on named instances? If that is the case check to see if the SQL Browser service is started. The Browser service is used to connect to named instances.

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