How is SQL pronounced?

The first version/draft of SQL was in fact called Structured English Query Language and the acronym was SEQUEL. Due to trademark violations on the acronym, the name was changed to Structured Query Language and abbreviated as SQL.

So it was intended to be pronounced as SEQUEL at first. Nowadays it's a matter of preference. There is no standard set for it (yet).

Some urban legends say that the Structured Query Language was actually a sequel to the previous Query Language and that the SQL acronym is intended to be pronounced as sequel.

According to the Computer Contradictionary (Stan Kelly-Bootle, MIT Press, 1995) :-

those pronouncing SQL as \ess-kew-ell\ rather than \sequel\ are instantly revealed as charlatans incapable of confuting the six and seventy jarring normal forms. Those who have really suffered are allowed to say \squeal\

In my experience, people coming from a Unix-y background (Postgres, MySQL) will be more likely to say "S-Q-L", while people from a Microsoft background (SQL Server) are more likely to say "Sequel".

Either. You say potato, I say pough-tagh-toe.