Installation Stuck while installing Common & Company DB on remote SQL Serve

Hi Forum,
I have two PCs - PC A and PC B. PC B has MS SQL 2008 R2 installed. Completely new installation and no other DBs. The SQL Server is called by the name of PC and it is "PCA".
On PC A, I am trying to install 8.81 SAP B1.
Step 1. The installation of server tools went throug fine. I can start the Service Manager, click on Settings->ConfigSecurity->MSSQL_2008, PCA, sa,passwd, OK->Connected Sucessfully.
Step 2. I choose to install Server Busines One Server->Database Already Installed->
ServerName: PCA
I choose to install CommonDB and USDemoCompany.
Step 3: On PCA I can see, SBO-Common is created. It has all the tables and stored procedures etc. But no Data at all.
Error : On PCB the installation is hung or stuck at "Server performing requested steps" and shows Computing Space Requirements, Common Database.
That's it, the installation is stuck no processor activity on either PC.
This is the second attempt. I did complete uninstall and reinstall. I tried with SQLExpress and 2008R2. Same installer Hang on both situation.
Please advise. Thank you.

The installation proceeded to near completion of remote database. SBO-COMMON installed without any errors on remote machine. However, SBODemoUSA and SBODemoCA had these errors :
B1_VattAcctView Failed
B1_DocLineView Failed
....and three more views failed.
On starting client on PCB, the client is unable to start or load any demo company. This is the error:
"Unable to Connect to companies in current server as algirithm is not updated; run common upgrade to update security algorithm".
Remember I am trying to hit database on remote server that is installed on PCA from client that is on PCB.
I have installed latest 8.81 licenses on both PCA and PCB.
Any idea how to get this installation with remote database working?
Note: The current server on Choose Company points to PCA.
Creating new database gives this error: Invalid Company DB (remember config files point to PCA remote machine for db).
Thank you.

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    Deepak Kori

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