There is a trial version available from Microsoft as well, but long term MSDE is probably the best, you get most of the functionality of it's big brother. You may still however want to get the trial version so you can get Enterprise Manager and Query Analyser which unless MS have changed it don't time out when the rest of the trial does, however I'm fairly certain it's probably a breech of the EULA to continue using them after the trial expires.
MSDE began as v1.0 which was a SQL7 compatible engine and was distributed with Access 2000 & Visual Studio. At that time MSDE was not free, you had to have these products and you were allowed to integrate MSDE into your application but not distribute MSDE by itself.
Since then MS has loosened the licensing and made MSDE available. AFAIK MSDE is still minus any client tools.
I've been playing with MSDE for a few weeks now and will be testing my forum soon running on it, it is identical to MSSQL Server in every way apart from the 3Gb db limit (who's ever gonna reach that!) and the 25 connection limit. Clever coding can work well, who in MS thought of introducing connection pooling and free MSSQL Server (MSDE)!