MS SQLEXPRESS Issue

If somebody is getting the following error when trying to create new sqlexpress data bases from Visual Studio please follow the instructions bellow to sort out the problem. I've been struggling for couple of hours to figure out the problem

Error : "Failed to generate a user instance of SQL Server due to a failure in starting the process for the user instance"

Resolution : Delete C:\Documents and Settings\USERNAME\Local Settings\Application Data\Microsoft\Microsoft SQL Server Data\SQLEXPRESS.

This is definitely authentication problem. When you uninstall and reinstall sqlexpress it can happen.