A few days ago, a colleague and I were rolling out a MOSS test enviornment for one of our clients, who wanted to name the Admin Content db something other than the default (which includes a nice, long GUID). Of course, we used the PSCONFIG utility to create our dbs before hand. Upon execution, my colleague was receiving authentication errors when executing the utility. Our first thought was that the account we were using had not been given sufficient priveleges on the SQL server. We spoke to the DBA who checked and verified that the correct permissions were there, so I had her check the SQL server logs to see what was happening when we were trying to hit it. Here is the error message that was logged:
Login failed for user 'DomainUsername". The user is not associated with a trusted SQL Server connection. [CLIENT: 192.168.1.5]
I then reviewed the script my colleague had wrote to execute the psconfig utility, and found that he was using the -dbuser and -dbpassword switches instead of -user and
-password. Since it was a windows authentication account, this was causing the problem. DBUSER is only to be used with a SQL Authentication account.
Hope this helps 
Rod
Rodney