A week or so ago I talked about how MSDE (Microsoft SQL Desktop Engine) or SQL Express should not be used in a production environment but I never indicated what versions of SQL server we do recommend. After someone asked me this the other day I did some looking around and never really could find that documented anywhere so here you go: With the current versions of SoftGrid you'll need to use either Microsoft SQL Server 2000 or Microsoft SQL Server 2005. Any Service Pack level is fine. We say 'SQL database' in the requirements but that's what this means.
You can find my original post on using MSDE here.
I'm sure my buddy Justin Zarb is knee deep in Halo 3 right now but he did take some time to write up a post on installing Microsoft SQL Server 2005 in case you're looking for some guidance in that area. You can check that out at http://blogs.technet.com/virtualworld/archive/2007/04/24/sql-2005-server-installation.aspx.