Close to quit working with VS 2005 and SQL Express (Cannot Create Database)

About 2 months ago, with great interest installed VS 2005 beta on my local Windows XP Pro. The SQL Express is running.

I cannot work FULLY on starter kits like Personal Web Site SK orCommunitySK. I create a new web site based on the Community SK. I can successfully bring up ASP.NET configuration, create roles, create users etc. When I look in the App_Data folder there is no ASPNET.MDF database. Where is this getting created?

2) Do we have permissions to create a SQL Database from VS 2005 Beta? I assume not, because at MSDN, there are generic SQL scripts for adding tables to Personal Web site SK andCommunitySK. For example, a start a new web ASP.NET web site. When I go to add new item, choose SQL Database, I get this error (see below). I am looking for documentation of SQL Express, I don't find any.

With very little time available after work, wife and kids, I am spending tons of hours looking to solve these issues (User Instance, Password Quality and this Access Denied) looking at MSDN, Forums etc. I agree that VS 2005 is a great product and there are great tutorials for VS 2005 both at Microsoft and other places (www.learningvisualstudio.net)

But if I cannot create SQL Databases, from VS 2005 interface, what is the use of going ahead and trying to learn these tools?

If somebody has specific answers or links that can resolve the above issues, please post here. If you have similar difficulties and how you overcame them, post them here. Thanks.
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Directory lookup for the file D:\Documents and Settings\<local computer name>\my documents\visual studio 2005\WebSites\Lesson07\App_Data\Customers.mdf” failed with the operating system error 5 (Access Denied).

CREATE DATABASE failed. Some file names listed could not be created. Check related errors.

User does not have permission to alter database ‘4BE36399-4C49-4103-963D-7F34626E3914’ or the database does not exist.

ALTER DATABASE statement failed.

User does not have permission to alter database ‘4BE36399-4C49-4103-963D-7F34626E3914’ or the database does not exist.

ALTER DATABASE ‘4BE36399-4C49-4103-963D-7F34626E3914’ does not exist. Use sp_helpdb to show available databases.

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[3805 byte] By [factoryman] at [2008-2-24]