Application needs to Authicate with AD

Hi,

I have an application called Sage FR100 installed. We have a site by site

VPN connection with our regional office.

So they can see our DNS servers via the Linkssys router but their IP scheme

is on a different subnet.

Also those PC's are not joined to the domain. They are connected to each

other via a peer to peer network.

Whenever we start this application, I get a password prompt where I enter

domain\user and the password.

Shouldn't that authenticate against AD and give me access to the application?

Instead I get the following error:

Connection failed:

SQLState: '28000'

SQL Server Error: 18452

[Microsoft][ODBC SQL Server Driver]

 Login failed for 

user\'(null)'. Reason: Not associated with a trusted SQL Server connection.

What can we do to bypass this?

Thanks