I Just found: http://groups.google.com/group/railo/browse_thread/thread/b7c9614cf39090b5
Not for lack of trying, I couldn't get Railo 3.2 to connect to my local sql2008 datasource on my new 64bit windows pc. Turns out, microsoft changed something for datasources in windows 7..
The solution as it turns out is to create a datasource under "MSSQL - Microsoft SQL Server (Vendor jTDS)" ... Apparently the regular Microsoft Vendor driver doesn't work for Microsoft anymore.