When configuring PaperVision Enterprise and when you arrive at the step to Provide SQL Server Connection Information provide the server name and PaperVision database name and then leave the Username and Password blank because you are connecting via Windows authentication Papervision will use the username and password of the user that is currently logged into Windows.

Also in your SQL Server Enterprise Manager under the security/logins make sure the user you added is using Windows authentication and you have selected the correct domain and also make sure that you have given access to the PaperVision Database.