A nice interesting troubleshooting session today, trying to connect to a remote SQL2008R2 instance.
Originally when setup, the server wasnt configured for remote access. Even after enabling the remote access, switching to SQL & Windows authentication and enabling the SA account, I still couldnt connect.
I used some great tips from Donabel Santos that can be found here: http://www.sqlmusings.com/2009/03/11/resolving-a-network-related-or-instance-specific-error-occurred-while-establishing-a-connection-to-sql-server/
Ultimately my issue was solved, by allowing SQLBrowser as a firewall exception on the remote server.