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3rd Party Service won't connect to SQL Server 2008 on a networked MS 2008 R2 server

I am using a report viewer/scheduler program for my Crystal Reports (not InfoView, but another COTS program).

Scheduled reports run fine when the report points to the SQL Server 2005 database on the local machine. Note: This database uses Windows authentication.

Scheduled reports do NOT run when the report points to another server (MS 2008 R2) on our network. The database is SQL Server 2008. It uses SQL Server Authentication.

Also, there are NO errors in the Event Viewer (for either machine) that would pertain to this situation.

Note: I CAN run/test the schedule manually and CAN view the reports on that other server. The problem seems to be with the scheduler's service.

I have set up the service to run using a network user, but this doesn't help.
I am sure this is something simple -- undoubtedly a permissions issue -- but I am stumped!
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Are you using sql server 2005 client to access an sql server 2008 instance?
You´d better install sql server 2008 client too.
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I assume (possibly a big mistake) that the service is using the SQL Server Management Studio that is on the remote machine. In that case, I would be using a 2008 client to connect to my 2008 database. The 3rd party software is designed to work on a machine that does not have a database.

C:\>sqlcmd /?

Microsoft (R) SQL Server Command Line Tool
Version 10.0.4000.0 NT INTEL X86
Copyright (c) Microsoft Corporation.  All rights reserved.

Open in new window

Did you see version ten?

Try a trivial way of connect.

sqlcmd -S YourServer2008 -E

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As I mentioned, I can connect to the server and I can run the report manually. The server with the database is using 10.50.16. The server with the software (Easy View) is running SQL Server 2005 (ver. 9). But I do not think that 2005 installation has anything to do with this problem. It is not feasible for me to put put 2008 on the server that already has 2005.
Thank you to all who suggested solutions. Unfortunately, this seems to be a problem with the service in the Easy View software. The schedule runs perfectly if the scheduler is run in the task bar, but it does not run correctly (for the situation described in this question) when run as a service.
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jnrmiller investigate the problem with our help and made up his mind about the solution.
We help him to debug.

With some post he figured out about the problem: «this post help me to figure out that ....»
Problem is with Easy View service -- not something that can be fixed.