How to register remote server? Authentication method is grayed out!

In SQL Server management Studio. I was trying to add remote server, so it would show up in registered servers. The authentication method is grayed out!

The only option to connect to the server is by clicking connect button. It remebers the old settings. It also shows me all server databases, even I have selected my database in options...

Can you please describe exact steps that you are following. Also please make sure that the server type is 'Database Engine'.|||

I think the reason is that I have SQl Server Express installed, but SQL Server 2005 interface. Do you know how to upgrade it to full version? I have DVD, but got some errors while running setup again "Can not read from device...". Thanks

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You may have a problem with your DVD disk or device. You may want to check with product support to resolve this issue.

Note this should just work, you should not need to install another version.

|||SQL Server Management Studio supports connecting to SQL Express. Are you trying to connect from the same machine or from a remote box? DO you experience this problem for this instance only?|||Same machine, I have realased I did not upgrade the original 2000 version! It asks me about service packs, however I have XP SP 2 already installed...|||

Could you send a screen shot of the authentication dialog to my email address when it is in the state that you descibe?

Also, please provide step by step explanation how it gets into this state (please also send this as a reply to this posting). Example:

1. Start SQL Server Mananagement Studio

2. Right click Database Engine in the Registered Servers dialog

etc. -- you get the picture...

Note that you have to remove the 'online' part from my email address.