Steve,
I don't think this is true with SQL Server 2005 Express. And I'm pretty sure the "governor" in MSDE that slowed down performance when there was heavy load/connections is gone.You're right- the governor is gone and enabling connections from other machines is much better understood. Thanks for the reminder!
"... They ne'er cared for us
yet: suffer us to famish, and their store-houses
crammed with grain; make edicts for usury, to
support usurers; repeal daily any wholesome act
established against the rich, and provide more
piercing statutes daily, to chain up and restrain
the poor. If the wars eat us not up, they will; and
there's all the love they bear us."
-- Shakespeare: Coriolanus, Act 1, scene 1