According me you have 2 choises if the application will be Client-Server:
- To make everything in VFP. Application will work faster than C# one
- To make C# application and to use SQL Reporting Services or CrystalReports which comes along with VS.Net. RS or CR could be called from C# apps. There no need to make 2 applications. If you will make C# application move all dataprocessing inside SQL using SPs, UDFs, Views, etc. VS.Net work poorly with large amounts of data.
SQLExpress2005 have limitations compared with standard SQLServer2005, but it could appears that it is sufficient for your needs.