It could be a few things. First make sure the Name of the SQL Server you are using is correct.
If the SQL Server you are using is local:
– Make sure you are running as a local administrator
– Make sure the SQL Server is running
If the SQL is remote:
– Make sure MSDTC is setup correctly
– Make sure you are using domain groups and users are in the right groups
Just a few things I can think of off the top.
Here is a link to an 8 part blog post on how to install and configure BizTalk: sandroaspbiztalkblog.wordpress.com/…/biztalk-2010-installation-and-configuration-enable-internet-information-services-part-1
Hope this helps./