I got this error while installing EPiServer CMS Site with SQL Server Database (The Alloy Tech Sample Site):
Are you installing to a local or remote SQL server? Are you using an existing db user or letting the installer create a new one?
I beleive this will fix your problem:
I can confirm instructions on the page Klas suggested work perfectly. One thing I didn't notice it mention was to change the IIS registry value back to 8 after install. This is important for the stability of IIS (patches, other sites, etc.) in future but doesn't affect your server install otherwise and IIS's backward compatibility is superb anyway.