Stevie, I am not sure what version of CR you are using - but seeing that you have VS 2010, I'd assume you are using 'SAP Crystal Reports, Developer Version for Visual Studio .NET" (?).
You need to be on SP 10 at minimum and I'd highly recommend SP 15 (). Additionally, according to the SAP Crystal Reports, developer version for Microsoft Visual Studio - Supported Platforms you should be using ODBC driver 11 for SQL Server (MSODBCSQL11.DLL).
If all of the above is satisfied, try the connection with SAP Crystal Reports 2013 - an eval of which can be downloaded from here:
SME Free Trials | SME Software | SAP
- Ludek
Senior Support Engineer AGS Product Support, Global Support Center Canada
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