Based on your screen shot, the credentials are wrong.
If you`re connecting to a local SQL server (installed on the same server as you try to install VMM on) you should either type in local or the computer name. if it`s on a remote server, use the server name and make sure that the TCP ports are open in the
firwall. But I guess that the user name is wrong. when using SQL Authentication, you should not use 'username\domain'. Either use a domain account if you have enabled for windows authentication, or simply use the username sa (and no back slash and domain)
and type the password. after connecting to your server, select the correct instance and database.
Kristian (Virtualization and some coffee: http://kristiannese.blogspot.com )