I will try setting up BackupExec as an instance as this isn't in at the moment as I don't have BackupExec loaded.

The reason for the SQL Express being loaded is that it is recommended in the Blackberry installation notes which I looked into after it failed the first time without it installed.
Because I agree with you MSDE should be enough.

You are quite right with the error message when I press next. "database server not found"?

I've tried using other instances here and also changing the path below to the location that holds the instances.