Here is an update of the situation that I am in.
I have tried to adjust the local security policy: Applying Everyone permission to anonymous users.
But with no success.
I have also tried to change the MS SQL server's port to 80, and get mssql_connect to connect. However I get an error message in the server's event viewer, when I tried different ways of putting in the port number for mssql_connect.
The php script I used to generate the error:
mssql_connect('69.162.105.186:80','useruser1','sai12ram');
The error is the following:
This gives me a deduction that remote mssql_connect over at my webhost's ends, is doing fine. But the problem is over at the ms sql server. Doesnt seems to be a network issue since the error is generated when I tried different ways of putting in the port number, shows that the packet has reached the server. It rather seems to be an issue with MS SQL Server 2005. Somehow, it is rejecting the connection.
I have seen quite a number of people having permissions problem as well. However, I have no idea what do they meant by that. Anyone has a clue?