In order to connect to the database, you need to use a
SqlConnection[
^] (have a look at the example in the end).
To get the connection string right, visit
http://www.connectionstrings.com/sql-server-2008[
^]
When you use local Sql Server instance, you can define a name of the computer or you can refer it using . (dot) which is a shortcut for local computer in connection strings.
Not sure why you're trying to alter any user. When you connect to the database, you either use Sql Server user authentication which means that you define a user name with a password in order to connect to the database or you use windows authentication which again means that your current credentials will be used for the connection.
If you use Windows authentication, notice that the credentials that are used with IIS are used for the connection. For example, have a look at
Setting up SQL Server 2008 for an ASP.NET website on IIS 7.0[
^]