SQL Server 2008 doesn't remember password inspite of checking the "Remember Password" checkbox.
I was suspecting a reboot would solve the problem. But, the issue persists.
Environment: Windows Vista Ultimate, SQL Server 2008
I have been hesitant to post this, as it seems so trivial and weird.
There is a solution for this in SSMS 2012 that worked for me. Microsoft now provides a mechanism for removing a server from the list of remembered servers, and removing the offending server from the list will allow you to save the password the next time you connect to it: