Because of the limitations of SQL Server 2005 Express it is not supported as a SQL server option for SoftGrid or App-V Application Virtual Servers. SQL Express doesn’t support the SQL Server Agent which means:
1. The SoftGrid/App-V database clean-up and resizing jobs will not run causing the database to grow uncontrollably overtime to the maximum of 4Gb at which point the SoftGrid Service could fail and cause a server outage.
2. The SoftGrid Management Console options to control database size and retention period for the metering data options will not work.
If you want a supported environment then you need to use either Microsoft SQL Server 2000 or Microsoft SQL Server 2005 for production Virtual Application Servers.
Source:→ App-V Blog