SQL SERVER Express edition is a cut down version of SQL SERVER 2005 and the next evolution of MSDE(MSDE is a cut down version of SQL Server 2000).
- MSDE maximum database size is 2GB but in SQL SERVER Express has around 4GB.
- In terms of programming language support MSDE has only TSQL, but SQLSERVER Express has TSQL and .NET.
- SQL SERVER Express does not have connection limitation, which MSDE had and was controlled through the Workload governer.
- There was no XCOPY support for MSDE, SQL SERVER Express has it.
- DTS is not present in SQL SERVER express while MSDE has it.
- SQL SERVER Express has reporting services while MSDE does not.
- SQL SERVER Express has native XML support and MSDE does not.
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