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During the Post Installation on ArcSDE for SQL Server 2005, the SDE login creation fails with the following error message:
The SDE login cannot be created with a simple password such as ‘sde’ due to the new password policy of SQL Server 2005.
This new password policy requires logins to have strong passwords that include at least eight characters. These policies also require that the password includes at least one number, letter, and a special character.
When using the ArcSDE Post Installation wizard, the SDE login is created with the password policy enforcement already enabled.
To proceed with the ArcSDE installation, the SDE login needs to be created and given access to the proper database. A more complex password needs to be provided for it to be deemed acceptable by SQL Server.
Set the SDE login password either by using the ArcSDE Post Installation wizard or manually setting it in SQL Server's Management Studio. See the link in the Related Information section below for instructions on how this can be achieved in Management Studio.