There are several good SQL database engines available depending on the platform that you're going to run them on. For either Windows or LINUX, you can use MySQL, PostgreSQL or even Firebird.
Using MySQL for several systems and it's working VERY well.
As Ramani rightly points out, MSDE is free, and you already have it. It also has the benefit of being the same engine as SQL Server (with some limitations).
It's true that MSDE doesn't come with any desktop tools. It is intended for run time use only. However, if you can get hold of a demonstration version of SQL Server 2000 (I know they exist, but am not sure how to find them), you can install the enterprise manager and query analyser, both of which work with MSDE, and will give you pretty well all the desktop control you want.
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