It's probably MD5, have I not responded to these types of posts enough times for somebody to know how to check and fix? Sheesh 
Paste this into a query window and run it, tell me the results. Use BuHTuK's fix if the xp_md5.dll check fails.
Code:
Declare @insname varchar(25)
if convert(varchar(25),serverproperty('instancename')) is null
set @insname='MSSQLSERVER'
else
set @insname=convert(varchar(25),serverproperty('instancename'))
select @insname as 'Instance',
serverproperty('productversion') as 'Ver', serverproperty('productlevel') as 'SP',
serverproperty('edition') as 'Edition'
if @insname<>'MSSQLSERVER'
begin
select 'THIS IS BAD! You must reinstall MSSQL. Please follow the guides next time.' as 'MSSQL is a named instance!'
end
begin
Declare @inspath varchar(10),@reg varchar(100),@tcpremote as int
EXEC master.dbo.xp_regread @rootkey='HKEY_LOCAL_MACHINE',
@key='Software\Microsoft\Microsoft SQL Server\Instance Names\SQL\',
@value_name=@insname,
@value=@inspath OUTPUT
set @reg='Software\Microsoft\Microsoft SQL Server\' + @inspath + '\MSSQLSERVER\SuperSocketNetLib\tcp\'
EXEC master.dbo.xp_regread @rootkey='HKEY_LOCAL_MACHINE',
@key=@reg,
@value_name='Enabled',
@value=@tcpremote OUTPUT
select @inspath as 'Instance path',@tcpremote as 'Remote connections enabled?'
if @tcpremote='0'
begin
EXEC master.dbo.xp_regwrite @rootkey='HKEY_LOCAL_MACHINE',
@key=@reg, @value_name='Enabled', @type='REG_DWORD',@value=1
select 'I enabled remote connections ! Please reboot !' as 'Remote connections checker'
end
else
begin
select 'This is good! I have nothing to do :(' as 'Remote connections checker'
end
select account.dbo.fn_md5('test') as 'xp_md5.dll check'
end