Here is what to do:
1. Run Sql script against configuration Database. ird_create_tables_sql
2. Created a New DBServer Application in CME
3. Installed DB Server (As a Client of Configuration server)
4. Created New Database Access Point, which uses new DBServer
5. In IR Designer I made a connection to the Database Access Point
6. Database access Point needs to point to the Configuration Database (Or where you ran the Script)
You do not have to create a New DBServer, you can use the existing one.