I am making a desktop application in C#, Visual Studio 2010 on Windows XP SP2 Professional.
If I run that application directly from the published folder without runnin
You are using ClickOnce and using a SQL CE database? Did you include the database in the Published application?
Did you verify that the long path (C:\Documents and Settings\USER\Local Settings\Apps\2.0\Data\MP63M1NA.ZG5\BCOVJJWN.C53\smas..tion_ddac366ea7cca062_0001.0000_9c79a710d42895b6\Data\SmasDb.mdf) to see if there actually is a database there?
From the three options in the error message, I would go for: or specified file cannot be opened
You'll have to think about where you want the database to be (on a non-developer computer), and make sure it is copied there.
See the post Working with Databases in Visual Web Developer 2005 Express Edition about the |DataDirectory| syntax.