VMware sets a restriction to 5 hosts and 50 guests wen you use SQL Express. I have it running with 6 hosts and 48 guests (incl. templates) on the same machine as the vcenter server. That is not what I want to keep and we'll change it to a SQL 2005 Standard on a separate SQL server (as we had it with SQL 2000 and VI3 before).
But I didn't have a single problem with this configuration, yet.
Having both on the same server can lead to a conflict: SQL 2005 requires IIS but vCenter uses the ports. So I have it installed but disabled.
I also believe that separating both runs faster than having it all on the same box.
AWo
VCP / vEXPERT 2009