From Microsoft's point of view, this was terrible!!! Some organizations decided that if they were going to have to recode the application anyway, they might as well switch to Oracle or IBM's DB2. So Microsoft released MSDE. It was designed to be compatible with SQL Server ... and they made it free and redistributable so they could convince as many developers as possible to use it! That's a better deal than you can get with Access and Jet! Playing into Microsoft's hands is not necessarily a bad thing. MSDE is a great data technology and you can't beat the price.
MSDE, for example, has client-server architecture. Database operations occur on the database server, not the client (the database engine must be installed on a server, of course).
And both MSDE and SQL Server conform to Transact-SQL (T-SQL). Jet doesn't. Jet has its own query language which is pretty nice for small scale applications, but you have to recode when you need to move up to SQL Server. (Transact-SQL is a superset of ANSI-SQL and it lets you program the server with custom business logic - almost an absolute requirement for true corporate databases.)
A big plus to Jet, however, is that MSDE doesn't include a user interface. (Access is the user interface for Jet.) You can, however, create what is called an Access Data Project with Access 2003 (which creates an .adp file). This is designed to provide a smooth transition to SQL Server.
