In case you aren't familiar with it, VistaDB is a lightweight, embedded database engine written entirely in managed code. It is a fantastic product that is coming on in leaps and bounds. Their aim is to be fully SQL compatible with SQL Server and are even adding support for TSQL.
I've used in on a few of my own projects and have been very impressed (I have a forum application with a 4Gb SQL Server database and approximately 2.5 million posts that I have just started converting to use it).
Even if you decide that you don't need it though it may still be worth looking at for testing purposes.
The client project I'm currently working on uses NHibernate for the persistence layer. Having developed an NHibernate Dialect and Driver for VistaDB (which I need to publish!) we've been able to use this when running unit tests. Instead of having to setup databases we can just create an in-memory database for use by the unit tests which is destroyed when they are finished. It is quick, convenient and avoids a lot of dependency issues PLUS it runs Linux / MONO (our app is cross platform).