Test Connection failed because of an error in initializing provider.

Solution:

In start menu programs, there is "Configuration Tools" menu is there for both SQL Server 2005/2008 and with in this menu there is another menu " Configuration Manager". In Configuration manager, click on 2005/2008 Network configuration and u will get the instance name of sql server. Just check the TCP/IP is enable or disabled. If it is disabled then enabled then it solve ur problem.