Are you getting the error "The database entered is not valid" when trying to set a default database in the ODBC Data Source Administrator, DSN configuration? I did too, and it took me a while to figure out the root cause.
It turns out I was using the SQL Server driver (version 6.01.7601.17514) , when I should have been using the SQL Server Native Client 11.0 driver (2011.110.3000.00)
There are apparently a few other causes of this error as well, but switching to the more recent driver took care of the issue for me.
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