Thank you for your feedback.
Local instances of SQL Server 2005 are enumerated with help of SQL-DMO. Instance names are returned in the form (local)InstanceName
. Of course, (local) can be replaced by 127.0.0.1 but in most cases it is not required. Our installation tries to connect to the selected instance and fails if it is not possible.
For the upcoming release, we will research this issue in detail.
the Telerik team