SQL Server 2005 Express is a great, lightweight database engine. It's very easy to install and offers an incredible list of features at no cost. (I can't imagine why anyone would want to use an open-source database, like MySQL or PostgreSQL, over SQL Server Express unless they were unable to run on the Windows OS.) The only drawback that I could find with SQL Express was its lack of management tools.
Now, Microsoft has answered this deficiency with a new SQL Express Management Studio CTP (Community Technology Preview). I encourage you to download the CTP at http://www.microsoft.com/downloads/details.aspx?FamilyId=82AFBD59-57A4-455E-A2D6-1D4C98D40F6E&displaylang=en and begin to play with it.
Let me know what you think of both the CTP and the SQL Express engine.