SQL Express 2008 runs fine on Win 7 - you don't need a server. I run Win 7 on an old Dell D620 Centrino laptop, with SQL Express 2005 and have the following running off
- 2x Full functional POS terminals (touch screen, thermal printer, pole display, cash drawer)
- 1x Server 2003 (testing 2003/XP usage)
- 1x iPod Touch (2Gen) - RDP
- 1x iPhone 4S - RDP
- 1x iPad - RDP
Personally, I have been setting up single terminals with SQL Express, as I bet the customer will want more terminals later, or an iPad.
To migrate from SQLCE to SQL Express can be done (I haven't tried yet), and really don't want the drama later.
Emre's script lists the tables that you need to empty data from - just don't use 'drop', use 'truncate' or 'delete' if you do it manually. It should work fine running the script. If you have problems, you can always email it to me and I can wipe the transactional data.
My only advise is that Microsoft SQL Servers tend to not release resources very well, and you should restart the system weekly to avoid running low on RAM.