When doing an upgrade running Microsoft Dynamics NAV CSIDE client on the same machine as your SQL server, please run the CSIDE client with full administrator rights (Run as administrator).
The reason why this is important is because, when connecting locally from a Vista/Windows 2008 server to SQL Server, it will strip down the Windows token from, among other things, honoring builtin\Administrator membership, unless connecting from an elevated command (run as administrator).
This is especially important when doing upgrades for NAV 2009 SP1.
This should not be needed if you connect from a remote workstation to SQL server.
— jtorres