Visual Studio 2010 does not have an embedded SQL server. However, a free version of Microsoft SQL Server called "SQL Server Express" comes with it; this is an option when installing Visual Studio.
Since this version is free for any user, it has some limitations, for example, for example: only one processor can be used by the express version, the maximum database size is 4 GB (10 GB in 2008 R2), it can use only up to 1 GB of RAM and it does not have the SQL Server Agent service.
Using SQL Server Express is very similar to using the full version of SQL Server. You just need to specify the data source (SQL server name) and authentication data in the connection string, and you will be good to go. Additional information on how to use this is available on MSDN .
Another option is "SQL Server Compact", which is primarily intended for web databases (for use with ASP.Net). You can install it using the Microsoft 'Web Platform Installer'. You can find more information about SQL Server Compact on MSDN .
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