I had to uninstall and reinstall SQL server 2005 and Express on my development machine. After the un-installation, I reinstalled SQL 2005 standard then SQL Express. When I tried to open a SQL express database in VS2k5 I got the error “Failed to generate a user instance of SQL Server due to a failure in starting the process for the user instance. The connection will be closed.” After much searching, I found out the solution.
- Open SQL Server Configuration Manager. Navigation to Start > Microsoft SQL Server 2005 > Configuration Tools > SQL Server Configuration Manager
- Double-click SQL Server (SQLEXPRESS) and change it to use LocalSystem
- Delete the folder
Windows Vista: C:Users[user]AppDataLocalMicrosoftMicrosoft SQL Server DataSQLEXPRESS
Windows XP: c:Documents and Settings[user]Local SettingsApplication DataMicrosoftMicrosoft SQL Server DataSQLEXPRESS
more info at: http://forums.microsoft.com/msdn/showpost.aspx?postid=98346&siteid=1
Does that fix your problem?