The collation for the SQL server that houses the Archive Manager database should be SQL_Latin1_General_CP1_CI_AS
However, when SQL 2008R2 server is first installed it will install a default collation based on the Windows OS regional settings where it is being installed and the default may conflict with this requirement.
Installing SQL 2008R2 on an English (United States) OS you will get the correct SQL_Latin1_General_CP1_CI_AS collation.
However, installing SQL 2008R2 on an English (anything else) OS you will get Latin1_General_CI_AS
See full list here: http://msdn.microsoft.com/en-us/library/ms143508.aspx
Although the Latin1_General_CI_AS Collation may appear to work, the only officially supported Collation for the Archive Manager database is SQL_Latin1_General_CP1_CI_AS
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