I've found Crystal Designer can refuse to connect to the datasource even though you provide the correct details, user and password if the database is password protected/encrypted. This only seems to happen in the designer, when opened from an application (say .net) it works fine.

To overcome this in your development environment do this (may differ depending on your version of MS Access):

1. Open MS Access
2. Select Open and then browse
3. Select your database and click the drop down arrow beside the Open button and click open exclusive.
4. Enter your database password when prompted.
5. Go File->Info
6. Click the Decrypt Database and enter your password when prompted.

Close the database, and then try again to connect in Crystal reports. Once you are finished with the designer, you can re-encrypt/password protect your database again.