The same problem was faced by me . Normally now the local server and the NSP database instance should be displayed. But in my case also there was no NSP instance displayed. Please see the dialogue box that I had on my screen below after clicking the add button :
The problem was that in the "Database Server" field the value <Local> was per-filled which I thought was the default value. But I was wrong. Since the server used was localhost the database server name should also be the same.
So I replaced <Local> with localhost and clicked add button and WOW! the sever an the NSP instance both displayed. Please see the screenshot below.
I hope this will prove to be of help to many people in future.
Best regards and Happy SAPping.