Yes, many people have used this without issue. It is most likely an environment setup issue.
If you are in an isolated lab environment you may want to try disabling all firewalls on the network. I have seen this cause similar issues. Not a solution for production, but may help you isolate the issue.
Also, you may want to try a domain user with adminstrative privileges for both the SQL authentication and the user you use when you log on to the system where you are running SCS.