SNIP...>MSDE "is" SQL Server - with usage restrictions (eg. the 2GB size limit).

No, it is not! MSDE *is* the SQL Server data engine with usage restrictions would be an accurate statement.
To date no one has satisfactorily identified those components of "SQL Server" that are necessary for its successful administration and use but are not part of MSDE.

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>>I Heard this through the grapevine.
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>>"It appears that MSDE can only be used if you have SQL-SERVER installed"
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>>Anyone knows more about this?
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>>I just hope that an official from MS will tell us where to stand on this.
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>>If it's true why would MSDE be provided with VFP and other products? It should be provided only with SQL-Server.