Mon,

Below are answers based on my personal experience...

>1) Is SQL server the natural choice for a database application written in .NET, or are there other options (I mean simpler options not more expensive like Oracle)?

Microsoft made it much, much easier to talk to SQL than any other data source in the .Net platform. You are still able to talk to other data sources, but not with the ease that you can SQL. Their are actually special data objects in the .Net framework just for SQL...

>2) Once we have a .NET application created, how hard would it be for our clients to install and run this application? If setup is going to be too complicated for end users, we'd then need to host the app ourselves, which leads to the next question:

If it is a ASP.net application, the setup for each end, end user is simply going to the URL from a web browser... Nothing to install. From a hosting standpoint, your client would need a decent Win2K or higher Web server with the .Net framework installed (and preferably a decent Win2K or higher SQL server as to not host both pieces on the same box)...

If the application uses Windows Forms, you can still deploy from a URL... However, each end, end user will have to have the .Net framework installed which is a little over 20 megs... A real pain in the rump...

>3) Are there hosting companies that would host .NET applications? These need to also host the database engine (e.g. SQL server)

Yes, and many of them. Prices vary depending if you want shared hosting or dedicated hosting. Dedicated is much, much more expensive. Let me know if you need help locating hosting and I'll be more than happy to list out some different URLs...

Hope this helps....