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MSDE Instance
I searched in the .NET directory and found two MSDE folders, one in Program Files\Microsoft Visual Studio .NET\Setup\MSDE and another in Program Files\Microsoft Visual Studio .NET\FrameworkSDK\Samples\Setup\msde
I installed each at a time and they installed two instances of MSDE, one called MSSQL and another called ComputerName\MSSQL$VSdotNET
Is there any difference between these two? (i guess not) but dont understand the reason why it should be this way.
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Well you ran two different setups probably created by two different teams. As to how they're different - do both start? Look in em. Funny, I must have followed a third set of instructions (my instance is called MSSQLSERVER)
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Yes, both worked together and i had both in Add/Remove Programs. However I removed one as it was not needed.