Eric,

Debugging uses DCOM. So, you must have permissions to access the SQLDBREG.EXE automation server from your remote machine. You set this up on the machine with the server using DCOMCNFG... I just did this the other day, let me see if I can find the directions again...

OK, this is from the "Troubleshooting the Transact SQL Debugger" topic in SQL books on line:

Incorrect DCOM Permission Settings
SQL debugging uses Distributed COM (DCOM) to communicate between your client computer and the database server. You must configure DCOM to allow remote users to attach the debugger to a process on the database server.

By default, the correct DCOM settings are in place when SQL Server is installed. However, because of security considerations for the computer running SQL Server, you may want to restrict debugging access. Use the following as a general procedure for setting up DCOM on the SQL Server computer.

Important If you plan on running the debugger as any user other than the one running SQL Server, DCOM will need to be correctly configured first. Follow these steps to insure you have execution permission.

On the server:

Run DCOMCNFG.EXE.

In the Distributed COM Configuration Properties window, select the Default Security tab. Under Default Access Permissions, click Edit Default.

If group Everyone does not already have permissions, you may add it by clicking Add. Select the local machine name from the List Name From list. Select Everyone and make sure that Type of Access is set to Allow Access. Then click OK.
OR

If you prefer to limit debugging to specific users, you can add individual domain user accounts (e.g. domain\account) with administrator privileges. If you choose to add only domain accounts instead of Everyone, make sure to add the SYSTEM account as well.

Switch to the Applications tab of the Distributed COM Configuration Properties dialog.

Scroll through the Applications list and select SQLDBREG. Then click Properties.

Select the Identity tab and make sure that The interactive user is selected as the user to run this application.

Click OK to close the dialog box.

Restart the SQL Server service.

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HTH,
BOb