Drupal 7.3 quits installation after creating few tables

Hello,

I have been given a machine with Drupal on some Linux flavour and have been asked to set it up with its backend as SQL Server.
I have configured FreeTDS library and verified that the utlity 'isql' is working. I am using DBLib module in this case as sqlsrv module is only for windows

I open http://172.26.70.74/drupal-7.34/install.php, when I reach the database configuration page, I enter the credentials and database name and the system DSN which is configured with FreeTDS driver. Then all of sudden in firefox, I get the page with nothing and a generic message:

The connection was reset

The connection to the server was reset while the page was loading.

I went to the database and found that it actually created few tables and functions before giving up. I traced the hits on my database using profiler and found that it fails at the following step:

CREATE UNIQUE INDEX formats_unique ON [date_formats] (__unique_formats)
Cannot create index. Object 'date_formats' was created with the following SET options off: 'ANSI_NULLS'.

It was in a transaction, so it quit the process after this and did not proceed further. My FreeTDS.conf file is default and using no specific settings. Please help as I have reached quite far and do not wish to give up.

Thanks
Chandan