Currently in CTP, The SQL Server 2005 - Everywhere Edition is a compact database(5MB memory footprint, approx 2 MB!! disk footprint)which is free to download develop and deploy*
Features are impressive• Full referential integrity with cascading deletes and updates• Multiple connections for foreground and background operations• Single data file with password protection and 128-bit file level encryption• Transaction support to commit and rollback grouped changes• A wide range of data-types, such as UNICODE character data types, IMAGE, MONEY, and IDENTITY• Supports database size up to 4 gigabytes• SET Functions (aggregates), INNER and OUTER JOIN, subselect, and GROUP BY and HAVING clauses• Scrollable and updatable cursors to provide fast and easy data access
Find out differences between SQL Server 2005 Everyehere Edition and Express Edition (and more) here.