When you install SharePoint V3 on SBS2003 in the manner recommended by Microsoft (side by side installation), SharePoint will install Microsoft SQL Server 2000 Desktop Engine (Windows) known as WMSDE.
The MSDE version that ships with Windows SharePoint Services is called as Microsoft SQL Server 2000 Desktop Engine (Windows)-(WMSDE). WMSDE and has no storage limits unlike MSDE.
When you install Microsoft Windows SharePoint Services on a single server using the defaults, you have an installation that uses Microsoft SQL Server 2000 Desktop Engine (Windows) (WMSDE) for your databases.
Some of the WMSDE Limitations as follows.
1) Cannot use WMSDE for web farm setup.
2) WMSDE overcomes limitations that MSDE has (like 2GB size limit, number of simultaneous connections). However you can't use it for anything else, because you can only use it for a specified signed schema (WSS Schema).
3) No Full Text search.
4) The instance of WMSDE installed can be used only by WSS.
Also, no matter where you specify the installation of Sharepoint you'll find that WMSDE installs under the Windows directory, which typically is on the C: drive of your server. Now this drive may not have enough space if you are planning a large Sharepoint environment so beware as WMSDE, from what we can determine, has no database limits. This means that the Sharepoint database could in theory grow and fill the entire C: drive.
If you are looking for the location of the Sharepoint V3 content databases that have been installed with WMSDE you'll find them at :
This will be the case if you have SBS 2003 standard or premium and simply accept the default installation options for Sharepoint V3. If you have SBS 2003 Premium, that includes some version of SQL, then you are able to have the Sharepoint content databases reside on the SQL server, which typically will be on the data drive of your server and not the system drive. However, to achieve this configuration you need to do thing differently from the way Microsoft recommends.
More on that later.