SQLCMD.EXE on SQL 2008 doesn’t work – HResult 0×2, Level 16, State 1

When you are using SQL Server Express 2008 w/ Advanced Services and get the following error trying to execute sqlcmd:

HResult 0×2, Level 16, State 1
Named Pipes Provider: Could not open a connection to SQL Server [2].
Sqlcmd: Error: Microsoft SQL Server Native Client 10.0 : A network-related or instance-specific error has occurred while establishing
a connection to SQL Server. Server is not found or not accessible. Check if instance name is correct and if SQL Server is configured
to allow remote connections. For more information see SQL Server Books Online.
Sqlcmd: Error: Microsoft SQL Server Native Client 10.0 : Login timeout expired.

1. Enable named pipes and TCP/IP on Network protocols
2. Restart the service
3. If you are still having problemas, change the named pipe to the following.
\\.\pipe\sql\query