[Updated 22nd July to expand on MSDE on Vista]
MSDE is the free lightweight version of SQL Server 2000 which many ISV use as part of their overall architecture - typically for roaming users or "edge" data synch. Its limitations are that it is purely a database engine with no management tools, it has a maximum size of 2GB and it has a workload governor that seriously inhibits throughput. Thankfully we have a much better alternative - SQL Server 2005 Express:
- Increased DB Size to 4GB
- Removal of workload governor
- Better integration with Visual Studio
- Free integrated Management Tool; SQL Server Management Studio Express
- SQL Server 2005 Reporting Services
If you are still not convinced then perhaps there is another reason you should look at migrating. Microsoft is working hard to help customers achieve the highest levels of security. As part of this push we have made the decision to not support MSDE on Windows Vista as we believe the combination of SQL Server 2005 Express and Vista is a better choice. We therefore recommend that you begin migration planning to SQL Server 2005 Express for any applications developed using MSDE that you believe will need to run on Windows Vista. Thankfully for most applications this will be relatively straightforward and we have resources to help. This is not a decision taken lightly - but reflects the emphasis we place on making our products as secure as possible.
Also, as this has proven to be such a "popular" topic, can I also draw your attention to this post on Vista Application Compatibility http://blogs.msdn.com/ericnel/archive/2006/06/07/620389.aspx. If you are developing solutions, then please do take the time to check these resources out and test your application installs on Vista sooner rather than later.