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SQL Server
SQL Server is usually the pick of database when developing with Microsoft technologies.  This is because SQL Server is so well integrated with Microsoft technologies, especially the .NET framework and Visual Studio.  I do find some limitations with SQL Server, but most can be overcome with the creative use of stored procedures.

SQL Server 2005's release is just around the corner, and is suppose to allow you to code T-SQL (Transact SQL, SQL Servers data manipulation language) with the native .NET languages such as C# and VB.NET.  If this turns out to be half as cool I it sounds, it could be a huge improvement for SQL Server, and help keep it on top of its open source competitor MySQL and continue to compete with the RDBMS powerhouse Oracle.

My biggest complaint about SQL Server is the ability to more around and transfer databases to different servers tends to be a challenge.  I'm not sure why Microsoft decided they would make it hard to accomplish these things, but it always seems unnecessarly complicated to try and copy a database.

SQL Server is suppose to release an Express edition for 2005 that is free of charge.  Right now, SQL Server includes a free version, the MSDE, that is throttled (only allows a few connections at a time and speed / size is limited) and includes no tools such as the Enterprise Manager.  So you have to know how to use oSql or have another tool to manage it, but it is a good option if your a developer and you have Visual Studio and don't want to pay the steep licensing fees.  I did run into a problem the other day with the MSDE though.  I was working on a website that runs an absurd amount of queries, and due to the throttle, I was running into deadlock issues that broke the site.  It took me a while to figure out what was going on because the error was showing in the SQL statement.  I didn't figure it out until I moved to a machine that was running an full licensed version of SQL Server.