@dobby - I suggest you try getting a LIBNAME working first. I'd also suggest trying the DSN-less approach and put everything in your connection string. Here is an example of what we do:
libname sqlsrvr odbc noprompt = "server=MyServerName;DRIVER=SQL Server;Trusted Connection=yes;" qualifier = "MyDatabase" schema = "MySchema";
All you need to do is replace MyServerName, MyDatabase and MySchema with yours. Once you get the LIBNAME working, you copy and paste the connection string into the Management Console Server connection properties. Please note the use of Windows Authentication (Trusted Connection=yes) to avoid supplying a userid and password. I hope this is how your SQL Server is set up.
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