If you have installed SharePoint Portal Server on Windows 2003 Server after installing Service Pack 1, you may face problems in configuring the Single Sign On Service. You will get error like
"Failed to connect to the database server. Verify connectivity and rights for the configuration account and try again."
Thinking that problem is from my side, I spent a lot of time configuring the rights of the account but all in vain. Finally google came to the resuce and here is the link that solved my problem. Solution is a little bit weird but haaaay.. it worked.
Find the ImagePath registry entry at the following location:
HKEY_LOCAL_MACHINE\SYSTEM\ControlSet001\Services\ssosrv
Remove the quotation strings from around the the ImagePath value ... and away you go.
Reference :Chris Johnson Blog :SharePoint SSO error and Window Server 2003 SP1
