SQL Server 2008 supports 2 modes of authentication:

1. Windows Authentication mode and
2. SQL Server and Windows Authentication Mode

You can view the current authentication mode that the server is using the following steps:

1. Connect to the Server using SQL Server Management Studio.
2. Right click on the server name (the root of the tree that is displayed in the object viewer)
3. On the properties window, select “Security”
4. Under “Server Authentication” section, you will see the current authentication mode of the server. Change the authentication mode here if required.

You have to restart the server. If SQL Agent is running this also will require a restart.
You will need SQL Server sysadmin privilege to make any changes to the Authentication mechanism of the server. This decision should be taken after thorough evaluation of the system and various security aspects involved.