Windows 7
1) Enable remote connections to Sql Server. The instructiions are for SQL Server 2005, but the steps are the same for 2008.
2) Set up Inbound and Outbound rules for TCP port 1433
3) Set up Inbound and Outbound rules for UDP port 1434
4) Set up inbound and outbound exceptions for sqlservr.exe. I am running a 64 bit machine so this file was located here: C:Program FilesMicrosoft SQL ServerMSSQL10.SQLEXPRESSMSSQLBinnsqlservr.exe
5) Set up inbound and outbound exceptions for sqlbrowser.exe. Again, I am running a 64 bit machine so the file was located here: C:Program Files (x86)Microsoft SQL Server90Sharedsqlbrowser.exe
6) Restart your machine.