That message means you haven't setup the DSN correctly.
You need to create a System DSN on the Crystal Reports Server Machine, with your SQL server details. Then repeat create exactly the same System DSN and User DSN onto your machine:
Setup a connection between the database, I am assuming that database is on the server machine and you know how to create a ODBC connection:
Click on your 'Start' menu -> 'Administrative tools' --> 'Datasouces(ODBC)'
Create a connection to the database there (only System DSN).
Then move to your machine, and repeat the same process as above.
Note: make sure you do a System DSN and not a User DSN under Data Source.
Open Crystal Reports on your machine and:
Click 'New standard report', You will see 'Create new connections';
Click on the plus sign and look where it says 'ODBC (RDO)';
Click the plus sign again;
Click 'Create new connection';
Once you click that, it will bring the list of databases and one of them would be what you set up in Crystal Reports server/your machine.
Click on it and it should connect successful to the database.
Note: make sure you setup the User/System DSN onto your machine.
This should do the trick.
2Stefanie, you might also need to use the 32bit driver for this if you are using a 64bit version of Windows. You can set these up using C:\Windows\System32\odbcad32.exe and then add a data source to the 'System DSN' as Zuul has touched on above in order to connect to your database server. – Steve Rathbone – 2012-07-03T12:04:25.853