Can't connect CF 9 to MSSQL 2008 R2

I hope some help is out there. I will post the error message at the end of this post. I can't verify a datasource in Administrator. this is the error:

Connection verification failed for data source: DHDataWeb_Dev

java.sql.SQLNonTransientConnectionException: [Macromedia][SQLServer  JDBC Driver]Error establishing socket to host and port: 127.0.0.1:1433.  Reason: Connection refused: connect

The root cause was that:  java.sql.SQLNonTransientConnectionException: [Macromedia][SQLServer JDBC  Driver]Error establishing socket to host and port: 127.0.0.1:1433.  Reason: Connection refused: connect

Any help would be greatly appreciated. I know this should be very easy, but I can't get it to work. I am running Windows 7 SP1, My SQL database, web server (IIS 7) and CF server are all running on the same box.

Thanks in advance.....

Didger (who is most confused)