*Note* This configuration is based on personal home use, not for public servers. I do not condone the use of illegal public servers, you will have to figure out those settings yourself.
How to Install and Setup:
1) Download and Install:

*You need both MSSQL and Management Studio*
-Run through the installation wizard and watch for successes. If any error comes up you may need to delete and re-install.
2)At the Registration Information Section, uncheck Hide advanced config options. This will help you in the future. In the Feature Selection, set them all to install the entire feature.
3)At the Instance Name page, check Default Instance. On the Service Account section, you will see three options under SQL Server. Choose Local System and click Next.
4)On Authentication Mode, select Mixed Mode and type in your server password. In this case it would be "shaiya123" then click Next. Skip the Collation page and choose Next.
5)The Configuration Option page is where most people screw this up. You need to place a check next to "Add user to the SQL Server Admin Role". This enables you to control your sql server. Without having admin access, you may have alot of issues down the road. *I unchecked Enable User instances because it's simply not necessary.
6)At the Setup Programs screen, you want all green checks, if an error comes up, read what it says and follow instructions on how to fix it. Everything must install successfully for you to move on.
7)Now when you finish open up your Server Config Manager.
MSSQL->Configuration Tools->SQL Server Config Manager
8)Once it's open, right-click Protocols for MSSQLSERVER and Enable everything you see to the right by right-clicking and choosing Enable. I did the same for SQLEXPRESS just in case. Right-click TCP/IP Choose Yes next to Enabled and change the ip address to 127.0.0.1
*By default the port is 1433, leave it as is* Click OK when done.
9)Under SQL Native Client Config, expand Client Protocols and Enable everything to the right. Close your SQL Server Config and Open SMSE(Server Management Studio Express).
Start->Programs->Microsoft SQL Server 2005->SMSE
10)On your Connect To Server login page, you will see Server Type, Server Name, and Authentication. By default the type is set to Database Engine, Server Name is the name of your computer, and the Authentication is set to Windows Authentication.
You need to change absolutely nothing. Leave everything as it is, and click Connect. If you have done everything you were suppose to correctly, you should now be logged into your SQL Server and should see basic Databases. Congrats, you set up MSSQL and you don't need to do anything else!
*After you have installed your PServer, when you log in to SMSE, you can change the Authentication to Server Authentication and use your passwords(i.e. user= Shaiya, pass= Shaiya123) and it will log in just fine.
**If you choose to log in with server auth, make sure the first letter of your password is capitalized. For example, Shaiya123 is the correct password, shaiya123 will not work.
I hope this guide helps. If you have any questions or problems setting this up feel free to post in this thread. Good luck!
Credit: ProfNerwosol-used parts of his guide and troubleshooted
Bump, I know some people are still having issues setting this up.







