Got my Beta2 DVD in the post last week. So I thought I'd throw it onto my machine (I normally use Virtual Machines but whats good for the goose and all that). The SQL Express install that occurs as part of the VS install, failed. So I decided that I would go ahead and just put the full version of SQL on. That failed too. I kept getting an error: "Error 29545. SQL Server Setup could not connect to the database service for server configuration. The error was: [Microsoft][SQL Native Client]Named Pipes Provider: Could not open a connection to SQL Server [2]. Refer to server error logs and setup logs for more information." I tried the usual, unistall, reboot try again but that didn't work. So I found this fix (for a slightly different error) and it worked a treat.
However, Express is still the way to go as it is the default engine (using the SQLEXPRESS instance) for local app data storage (AttachDBStorage), you can get a great overview of the benefits here.
Given that I didn't have express but I had an application that wanted to use express to populate an asp membership DB. I was hoping to redirect the app's config to use to full SQL instance. This was pretty easy (although it took a real developer to help me out - thanks Thomas), I used the following in my web.config to override the machine.config settings.
<connectionStrings>
<remove name="LocalSqlServer" />
<add name="LocalSqlServer" connectionString="server=locahost;database=aspnetdb;Integrated Security=SSPI;" providerName="System.Data.SqlClient" />
</connectionStrings>