CRM 4.0 FAQ > Install / Setup and Deployment > Will SQL Named Instances be Supported
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Yes, Menno has the answer at this link with a little more history
http://blogs.msdn.com/mscrmfreak/archive/2007/10/18/microsoft-dynamics-crm-4-0-named-instances.aspx
Last updated on October 19, 2007 by David Yack