How can I add SQL Server 2008 Express to the list of Pre-requisites in Visual Studio 2008 SP1 MSI Installer Project.
The option of SQL Server 2008 Express is included in the prerequisete list
You have to download the SQL Server 2008 Bootstrapper from the MS Download Center (I think it is also included in the VS2008 Express Edition) and copy it into C:\Program Files\Microsoft SDKs\Windows\v6.0A\Bootstrapper\Packages. Each folder under 'Packages' is an entry of the list of Pre-requisites in Visual Studio 2008 SP1 MSI Installer Project.
BTW - If you want to create a custom Bootstrapper have a look at the article Authoring a Custom Bootstrapper Package
In Visual Studio 2010 the option of SQL Server 2008 Express is included in the Prerequisites list.
Copied and pasted from: Sql Server Express Blog
As far as I know, when Visual Studio 2008 was realesed, SQL Server 2008 doesn't exists yet, only the 2005 version. So I think that you might not install the SQL Server 2005 when installing Visual Studio 2008, and after that, install SQL Server 2008 separately.
Regards.