can't (re)start SQLServerAgent after changing its logon credentials

Since Copy Databas Wizard failed to copy anything from remote SS20005 (both are with SP2 3054) in any combination,
I changed SQLServerAgent(myinstance_name) to run under Network from Local System with the help of SQL Server Configuration Manager

For this change it was restarted, failed to start again and continues to be stopped giving
"SQLServerAgent could not be started (reason: Unable to connect to server '<mymachine_name>\<myinstance_name>'; SQLServerAgent cannot start)."

I changed SQL Server Agent (myinstance_name) back to Local Service, then to Local System and still can't start it.

So, my questions:
1)
What has happened and how can I start SQLServerAgent?

2)
Why cannot I start it under Network Service? since it apparently should access remote resources for CDW to copy from remote SS2005

This is on MS Windows XP SP2

PS
After few trials I amnaged to restart it again under Local System but still cannot change to any different one

If you change the account under which SQL Agent starts you need to make sure that the account has permissions within SQL server or else each tim eit tries to access SQL Server it will fail. Have a look at these:

http://support.microsoft.com/kb/283811

http://support.microsoft.com/kb/907557

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You can verify the permissions, windows group membership required, etc for the service accounts in the following books online topic:

Setting Up Windows Service Accounts

http://msdn2.microsoft.com/en-us/library/ms143504.aspx

The NT Rights and Privleges section has the local windows group membership requirements - that one often gets overlooked for some reason. The help topic is pretty thorough and does a good job of covering the requirements.

Also note that as the article states, using Network Service isn't recommended. A domain account can provide the same network access but in a more secure manner. Otherwise you open some holes - network service means you give permissions needed for the CDW to the machine account. And then other apps, services running under network service get the permissions as well as they would be operating under the machine account.

-Sue