You can use an exsisting SQL srever database, the only reason it says an empty one is incase you have any tables of the same name already which could be overwritten. All tables in the forum start with tbl so unless you have any table names starting tbl you will be pretty safe.
You need to have a username and password when connecting to a SQL srever database using TCP/IP, the SQL server needs to be setup to work in mixed mode. I don't even think you can run an SQL srever database without a username and password, but I could be wrong.
For my local SQL srever database I set it up to run in mixed mode when installing it and entered a password, I then use the system adminstrator account to connect and the default password I used when installing the SQL server so it is:-
User:- sa
Pass:- default when installing the SQL srever