Setting up the asp.net forums app on my local XP pro machine took some puzzling. The setup proposes localhost as sqlserver. Running the app resulted in a Cannot generate SSPI context error. There is a MS support article on this HOW TO: Troubleshoot the "Cannot Generate SSPI Context" Error Message. This article is interesting but tries to cover to much. In my scenario it boiled down to sql server being unable to set up a trusted connection to Localhost.
This was the connectionstring (found in the web.config)
<add key="connectionString" value="server=localhost;Trusted_Connection=true;database=AspNetForums" />
Changing the server part of the connectionstring to the name of my machine
<add key="connectionString" value="server=MyComputer;Trusted_Connection=true;database=AspNetForums" />
resulted in a proper connection and got the app up and running
Peter