I'm running SQL Server 2008 Developer and after reading https://stackoverflow.com/questions/293281/why-wont-visual-studio-2008-create-mdf-files-with-sql-server-2008-developer-ins I want to install SQL Server 2008 Express along side it. I know from experience that both the Developer/Standard/Enterprise and Express versions can be installed side by side but what's confused me are the management tools. When installing SQL Server 2008 Express do I want to install the engine-only (assuming that the management tools from Developer operate fine against it) or do I need to install the management tools + engine? I'm not sure if the management tools clobber each other and/or there are other ramifications to this side-by-side install.
You only need the engine - the tools from the developer edition will be able to connect. The express edition tools do not have al the functions of the enterprise edition ones (which is essentially what developer edition is), for instance (at leas in SQL2005, I've not used 2008 express yet) the SQL profiler is missing from the express edition tools.