Hi Guys,
I solved this it turned out that re-reading the Knowledge base article helped.
The problem was that the sql server name did not match the PC name.

It fix it I uninstalled my msde database then removed INSTANCENAME from the seup.ini then installed again.

Now I have a service called MSSQLSERVER instead of MSSQL$PDM_SQL.

It fires up and works like a dream..

Thanks