Jeepers. Just spent a whole day trying every possible thing I can think of to get Sharepoint 2010 to install on SQL Express. Turned the firewall off, messed with the SQL listening port numbers, played at length with AD and SQL permissions – all to no avail.
I was just about to take the server out, tie it to the back of my car and drag it around the car park when I finally had a breakthrough. When doing the ‘Configure Sharepoint Wizard’ you are asked for the name of the server. All day I’ve been putting in the name of the server, but what made it work finally was <servername>\<databasename>.
A bit of extra help in the wizard might have saved me a day – thanks Microsoft…
The Data Plumber 