I\'m creating new login in SQL Server 2008 with following sql script:
CREATE LOGIN [xyz] WITH PASSWORD=\'xyz\',
            DEFAULT_DATABASE=[master], DEFAULT_LA         
        I got a way to go around the problem.
bingo the sql authenticated instance open .. :)
Actually in this way we cheat the sql authenticated instance as it tries to find an already running instance.. worked fr me.. good luck
I have not used the script style, but login through GUI I encountered the same error code. I had entered wrong user name and this is why I was getting the Sql Server, Error: 233.
 In order to resolve this, you should input the following information: 
Server Name: MachineName\SQLEXPRESS 
Authentication: SqlServer Authentication 
User Name: Assigned user-name or simply sa
Password: xyzpqr
NOTE: Here I have wrote above data for demo purpose only, actual data is your machine & software's properties.