It could be a few things. From the error messages it looks like it can't find the SQL server matt. I'm gonna assume that the server does exist. Check that the SQL server allows Named Pipe connections. I've worked in places that only allowed tcp connections to sql servers for security reasons.

I'm not sure how to change the connection method using DBI, i've always just setup an ODBC connection, and setup the connection properties through the windows interface.

Depending on how complicated the setup is, it could be a networking issue. I've ran into this problem before at work, and the SQL servers only allowed access from certain systems, one of which wasn't mine.