Story from the field new VM for development usuall setup VS 2010 , Win 2008 + SQL R2 , SQL 2008 instance name is called sql2008
I tried init my development storage using dsinit
dsinit /sqlinstance:London08R2\sql2008
and then I got that
Failed to create database ‘DevelopmentStorageDb20090919′ : A network-related or instance-specific error occurred while establishing a connection to SQL Server.
The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections.
(provider: SQL Network Interfaces, error: 25 – Connection string is not valid)
One or more initialization actions failed. The development storage cannot be used without resolving these errors.
Wow I did that few times in my life 
what’s wrong, right SQL instance is named so let’s try
dsinit /sqlinstance:\\London08R2\sql2008 nope the some error.
Right /sqlinstance means instance name not machine name so finally
dsinit /sqlinstance:sql2008 worked
I should remember that or I should check documentation some says (RT(?)M – read the manual (no (f))
http://msdn.microsoft.com/en-us/library/dd179457.aspx