Well, the dot and localhost may not work unless you have TCP/IP turned on for that instance of SQL Server. The localhost is defined within the hosts file on the machine and it is the same as providing the loopback IP (127.0.0.1). The dot should more than likely resolve the machine name, but again, is not 100%. Also, the browser service can become a factor under certain conditions as well.
A couple of things here. First, look at the log file to make sure that this is your problem to being with. A log file is created for each unique deployment of the databases and you can find this here:
c:\program files\common files\MicroFour\StrataFrame\StrataFrame_ResultsX.log
The X above will be replaced with a number for any install past the first one. Also, you can adjust the path to match your machine and install (languages, OS versions, etc.) But a unique log file is created for each deployment. Open it up and look at the error.
Secondly, if you want to verify your SQL connection and reference, just open up SQL Server Management Studio (SSMS) and attempt to connect to your server...whatever credentials that you can use there will also work within the SF install.
That should give you plenty to help diagnose where your SQL issues are coming into play. Let me know if you don't find your answer.