Stephen,
2. You are right, and I don't generally use the SA login, I used it here because it is new development phase and I wanted to minimize problems with user rights and security till everything works correctly.
1. I tried to put it in the connection string (#Replace CS_CONNECT "SERVER=PRMADV;USR=SA;PWD='';Trusted_Connection=no ;Database=SMS") but it still pops up that login panel.
I also tried with a user who has a password and admin rights as well, so the PWD is not left blank, but that didn't change the outcome, panel still pops up.