Create a new SQL Server 2008 Database file in VS2008
SQL Server 2005 next to SQL Server 2008
Visual Studio doesn't know which kind of database it should create when you ask it to create a new database file. Should it be SQL 2005 or 2008?
By selecting Tools -> Options -> Database Tools -> Database Connections, fill the SQL Server Instance Name with the name of SQL Server 2008 Express instance to create SQL Server 2008 database files or the SQL Server 2005 Express instance to create SQL Server 2005 database files.
Many thanks to Jian Kang for providing me with this solution!
Cheers,
Wes