When you create a database in MS-SQL you have the option to use Windows Authentication or mixed mode, where you can use both Windows Authentication and logins to access the server.
If you have created your database with Windows Authentication you will find that none of the logins will work. To fix this you need to change the server authentication mode.
In this short video I show what you need to do to enable the mixed authentication mode and you can read how to do it at http://technet.microsoft.com/en-us/library/ms188670(v=sql.100).aspx The important thing is to restart the server once you have done this. The connection will also be lost, so disconnect from the server and re-connect or just close SSMS and restart it.