[Sean2]

Just uninstall msde from add-remove programs and you do NOT even need to restart the machine after uninstalling. msde will be installed by qc installer itself.
and then everything works fine...

Good Luck
nswer:
Two ways to iuninstall MSDE, the easy way and the hard way:

Easy Way:

1. Open the Control Panel and double-click Add/Remove Programs.

2. To uninstall MSDE, select MSDE and click Install/Uninstall.

Hard Way:

Here is how Microsoft suggests manually removing MSDE.

A) Remove the following registry:
1) Remove the following ID_Number from your MSDE 2.0 instance
HKEY_CLASSES_ROOT\Installer\Products\ID_Number
-- It has key value name 'ProductName' which displays the instance name.

For example, "ProductName" = Microsoft SQL Server Desktop Engine
(MYINSTANCE)

2) If you had patch applied on this MSDE 2.0 instance, you need to
remove
ID_Number for that MSDE 2.0 instance:
HKEY_CLASSES_ROOT\Installer\Patches\ID_Number

3) For MSDE 2.0 Default instance, remove
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\MSSQLServer
For MSDE 2.0 named instance, remove
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Microsoft SQL
Server\Your_instance_name

4) If you have the following key points to MSDE 2.0 productGUID, then
remove the InstanceComponentSet.x
For example, HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Microsoft
SQLServer\Component Set InstanceComponentSet.x
-- For example, InstanceComponentSet.1 has value matching the
productGUID
of sqlrun01.msi.

5) Remove:
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\Curr
entVersion\Uninstall\Produ
ctGUID
-- The Product GUID which refers to your MSDE 2.0 instance.

6) Remove the Sql server service key:
For MSDE 2.0 default instance, remove
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Servic
es\MSSQLServer
For MSDE 2.0 named instance, remove
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Servic
es\MSSQL$Your_Instance_Nam
e

7)Remove the Sql server agent service key:
For MSDE 2.0 default instance, remove
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Servic
es\SQLServerAgent
For MSDE 2.0 named instance, remove
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Servic
es\SQLAgent$Your_Instance_
Name

B) Remove the MSDE 2.0 instance data and program install directory:
For example, G:\Program Files\Microsoft
SQLServer\MSSQL$Your_instanceName\data
For example, G:\Program Files\Microsoft
SQLServer\MSSQL$Your_instanceName\binn