Ok lots of folks are confused and are having their installations bounced. There is some info in the release notes but this is the definitive KB http://support.microsoft.com/kb/956139

Let me try and explain;

SQL Server 2008 has dependencies on (and includes) VS 2008 SP1 and its components (BIDS is just VS 2008, SSMS uses components), plus NetFx 3.5sp1. SQL includes the RTM versions of both of these, HOWEVER they are not broadly released yet. There is a check in SQL Server Setup that if you have an old version (Beta, RC, whatever) it will bounce the install and ask you to upgrade to the RTM bits...which of course are not yet available independent of SQL.

KB lays out the options but for now here they basically are;

1/ Don't install the components that need SP1 of VS (basically the tools) yet, install the services and then install the tools later when Sp1 is out.

2/ Use a clean machine that does not have previous versions of VS 2008 (and I think Netfx 3.5) on it.

Of course this begs the question when are these bits going to be available for VS independent of SQL, well given the RTM bits are part of SQL you can imagine its not going to be long. And as Express is released by VS and SQL at the same time, thats when Express should also come out.

 

Clear as Mud? I try...

 

UPDATE: Thanks to a question from Dave it looks like option 2 above is going to make life VERY difficult for you if you want a box that has SQL 2008 RTM and VS 2008 Pro/Team SP1. I've pinged several folks in SQL and VS setup teams to see if there is a problem, my advice for now would be to wait until VS SP1 ships if you want an easy route to have everything on the box.