Cannot Connect to Server - A network-related or instance-specific error

I am getting this error when trying to connect to SQL Server:

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: Named Pipes Provider, error: 40 - Could not open a connection to SQL Server)

An error is generated when I try to set up my database in Visual Studio 2010 for gridview. I have no idea how to troubleshoot this problem.

How would you troubleshoot this issue? What additional measures, except the ones listed in the error message, should I take to figure out what is going on here?