Can I distribute the MS SQL 2005 Express edition along with my application to the customer?
Can i distribute the MS SQL 2005 Express edition
You need to register for the free redistribution rights in order to do so. The contact details are here. Not doing so may mean you are doing something illegal.
From the SQL Server 2005 express download page:
Building and shipping applications with SQL Server Express? Sign up for free redistribution rights here.
You don't have to pay Microsoft when you sell software created using their tools. You may have to pay if you wish to redistribute the tools.