Adding SQL database to a project fails

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After installing Visual Studio 2005, you may see the following error when trying to add a SQL database to your project:

Local database file

User does not have permission to perform this action.

The problem occurs because the user is part of the Administrator's group but not part of the User's group.  SQL Express requires the user to be implicitly or explicitly in the User's group.

Workaround is to add your user to the User's group.