I was setting up a VM for testing purposes today and had cause to change my password on a SQL 2005 instance (admittedly using the 2008R2 tools). A trivial, quick task via management studio, or so I thought. I came up against the following error.
Msg 15535, Level 16, State 1, Line 1
Cannot set a credential for principal 'sa'.
The 'Credential' tick box was not ticked, in-fact it was greyed out meaning I could not select it either.
The solution was to turn to Tsql.
Run the following against the master database
ALTER LOGIN [sa] WITH PASSWORD=N'n1ncomp00p'
No, that isn't one of my passwords, but I like it...
Cannot set a credential for principal 'sa'. (SQL Server 2005/2008)