Cannot add Network Service as User/Login
It can be a bit misleading, when working with the German version of SQL Server and/or a Windows Client/Server OS.

When you select the &lt;HOSTNAME&gt;\Network Service from the Active Directory pop-up in the SQL Server Login dialog, then SQL Server automatically displays the login (when closing all the dialogues with OK) as:

 &lt;HOSTNAME&gt;\Network Service


This is actually wrong.

German Solution

If you enter the following German string then it will resolve correctly:

NT-Autorität\Netzwerkdienst


English Solution

If you were to use an English Windows / SQL Serer installation then you would have to enter:

NT-Authority\NetworkService


If you click on OK, then the SQL Server Login will be created.