You may discover that you cannot select the "Use the dedicated instance of SQL Server" option when you upgrade to Microsoft System Center Data Protection Manager 2012 (DPM 2012) because the option is unavailable. When you point the installer to an existing local installation of DPM, you receive the following error message:
You cannot choose the instance "instance name" on the local machine ID 4324. Specify a different instance.
This problem occurs because the current instance of a local Microsoft SQL Server 2008 R2 installation is named "MSDPM2012." You cannot run an instance of SQL Server that is named "MSDM2012" during an upgrade from Microsoft System Center Data Protection Manager 2010 to DPM 2012.
For more details and a resolution, please see the following:
J.C. Hornbeck | Solution Asset PM | Microsoft GBS Management and Security Division
System Center All Up: http://blogs.technet.com/b/systemcenter/
System Center – Configuration Manager Support Team blog: http://blogs.technet.com/configurationmgr/
System Center – Data Protection Manager Team blog: http://blogs.technet.com/dpm/
System Center – Orchestrator Support Team blog: http://blogs.technet.com/b/orchestrator/
System Center – Operations Manager Team blog: http://blogs.technet.com/momteam/
System Center – Service Manager Team blog: http://blogs.technet.com/b/servicemanager
System Center – Virtual Machine Manager Team blog: http://blogs.technet.com/scvmm
The Forefront Endpoint Protection blog : http://blogs.technet.com/b/clientsecurity/
The Forefront Identity Manager blog : http://blogs.msdn.com/b/ms-identity-support/
The Forefront TMG blog: http://blogs.technet.com/b/isablog/
The Forefront UAG blog: http://blogs.technet.com/b/edgeaccessblog/