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Problem :

I was trying to get my WCF project with SharePoint 2010 beta product.  I had my database on other server. My development server was hosting WCF and SharePoint.

When I run it I started getting following error:   Login failed for user <<domain>>\<<server name>>$

Workaround/Solution:

It  will  need to add user ‘NT AUTHORITY\NETWORK SERVICE’ to your database  to get rid of this problem.
An asp.net application  is running under NT AUTHORITY\NETWORK SERVICE account.