ODBC 32bit Connection Windows 7

if you write the server name in the odbc doe it connect to it ?

No I have tried that aswell and this is the error I receive:

Connection failed:
SQL state: '010000'
SQL Server Error: 231
[Micorosft](ODBC SQL Server Driver)[DBNETLIB]ConenctionOpen
(Connect()).
Connections Failed:
SQL State: '080001'
SQL server error: 17
[Micorosft](ODBC SQL Server Driver)[DBNETLIB]ConenctionOpen

if you nslookup on the server name from this pc do u get the correct response of the server ip address.

Yes it does and also resolves by ip to name

make sure that the sql server is functioning and healthy, could you turn off the firewall and try.

verify that the  this sql server has a named instance. On services you'll see the sql server as MSSQL$instancename, so, in this case, your sql server is "servername\instance" and all strings you'll have to connect using servername\instancename as a name of this server.
Also Turn enable remote connections on firewall options in windows 7 . Then, enable "file and print sharing". this must be done on the sql server too .

' I am aware about the differences between the installed 64bit ODBC and the Syswow 64 bit / 32bit client connection.'
Are you sure ?
ODBC Syswow 64 bit you must use and make FW exception for it.
Try disabling the FW just to check if it functions ok...

Just to make sure...   Are you sure you've used the 32-bit version of the ODBC utility (C:\windows\SysWow64\odbcad32.exe)

There is no x64 version....They are both x32.

No senad, that's not correct...   yes, they both have "32" in the name, but the one in C:\Windows is indeed the 64-bit version, whereas the one in C:\Windows\SysWow64 is the 32-bit version.

cp..
It’s important to understand which kind of DSN you have. On an x64 system, you can create an ODBC connection(DSN) on the 32-bit side of the system or on the 64-bit side of the system.
32-bit applications will only see ODBC connections created in the 32-bit side, and 64-bits applications will only see ODBC connections from the 64-bit side. Each kind of application has is own registry.To setup DSN for 32-bit application you must use:
%WINDIR%SysWOW64odbcad32.exe
and for 64-bit application you must use:
%WINDIR%System32odbcad32.exe

I have checked that an instances is configured and available.