error when creating xsd using the create dataset wizard

in one of my system

when i add a dataset & using wizard trying to set the database using sql authentication

i get error login failed for user sa

but if i use windows authentication i get connected

i checked the sql server it has mixed authentication  but still i am not able to create the xsd

& suppose  i copy the the dataset mad eon other system to this system i am bale to aceess the data in the application but not able to configure or preview data

how do i rectify .

is it he installation issue