You can use MSDE or SQL 2005 Express, but you have more options than MSSQL/MSDE
Look at open source databases
MySQL - very fast and popular, but with tricky licence and poor suppor for a real transactional environment.(unless something changed)
Postgres - very advanced,very solid, Oracle like, with a very permisive licence. The last version has a Windows native version.
Firebird - small footprint(3 MB), fast and rock solid (my favorite). I didn't succeded to break one of its databases yet.

>2. reliability- the main reason sql is more reliable may be because the files and indexs are not opened by multiple computers and the sql files themselves are only opened by sql running in the server.

I will add to this the "full of bugs" network components (file sharing, cache, locking ,redirector,network client, etc). It is not VFP alone the source of corruptions.

> my question: aside from the reliability bec of the setup/achitecture of a client/server system, are ms sql files really more stable than vfp? say both sql files and vfp files runs on a standalone computer and we test it by switching off the power (not properly shutting down windows) for a very lot of times.... eventually does vfp files get more corrupted while sql files does not?

I tried this with V_F_P, MySQL w/ InnoDb and Firebird with 5 instanced pumping data. DBFs got corrupted after first try, MySQL after the second and Firebird was ok after the fifth. I was afraid to break my machine and stop. I don't know the reliability of MSSQL/MSDE in a local environment. You can try :)