SOLVED!
The culprit was the SBS08 firewall. Once it was disabled the client machines were able to connect to the shared database where I'd installed AC. For anyone who comes across a SQL error similar to what I wrote above that isn't covered by the FAQ or previous threads here, DISABLE the OEM firewall then simply enable it once the installs are done. Its weird because the virtual IT program didn't see a problem with the firewall being active so I simply overlooked it.
Bert, I didn't ever uninstall SQL Standard because I agreed with you and didn't think it was the problem. Seems to be working fine now, just in time. Thanks to you and Carlos I have retained my sanity once again.
