If you are installing DBXL on a Web Server and setting it up to access a separate SQL server machine on your network, you need to add a security login to that separate SQL server machine that enables the machine running DBXL to access it. Use DOMAIN\MACHINENAME$ where DOMAIN is the domain in which both machines are joined and MACHINENAME is the machine name for the server on which DBXL is being installed. You will need to add the $ sign to the end of the machinename.
The prefered authentication method for this scenario is SQL Authentication. Windows Authentication will work, but you will need to give the server machine account where the Web Service is installed sysadmin access to the SQL instance. In addition, run ASPNET under a domain account.