When a user creates datasource with a name which already exists, a user can click OK but this datasource won't be overridden. In the wizard is warning (screenshot) that "A Data Source with the name SQL_Server_2008_Books_DS already exists." but a user can click OK. A user can think that datasource was overridden.
This is confusing so I think that designer should show some warning that datasource will not be overridden or the OK button should be disabled.