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Sharepoint Foundation reached DB limit on express. Upgrade express to standard (2008 - 2008R2)

We started a project to test sharepoint foundation 2010 to see if it fit our needs. We went full boar on it and reached the DB limit for the express version that came with foundation. (Basic Install 4GB). Unfortunately we put it into production. I paid and opened a support ticket with MS and spent two hours upgrading to Sharepoint Standard.. However it failed because of db rights and when I asked the MS tech if this would even solve our 4gb limit problem he said.. NO you have to upgrade sql from express..
 Now we need to install SQL 2008R2 standard edition. During the installation in the test environment I get SQL Server 2008 R2 Feature Upgrade Failed. The specified edition upgrade is not supported. (Using the upgrade feature in the SQL Install package) I did run the System config checker  prior and all was ok except that I get a warning that .net is not connected to the internet (test environment is not). During the installation of tools I  did get an error message that you server needed to be rebooted which I did and did not get on the next install. However the installation does not continue and gives the edition error.
 I have read the MS documents on upgrade paths and everything seems to be a supported upgrade path. Foundation is running on a Windows Server 2008R2 running under HyperV.

Any help would be greatly appreciated.
1 Solution
1) Install a SQL-Server 2008 Standard edition on seprate VPC/ box.
2) Attach you express db to this machine.
3) Change the connection string in the registry.

HKLM\SOFTWARE\Microsoft\Shared Tools\Web Server Extensions\12.0\Secure\configdb

4) You can get this from code as well :-

RegistryKey key = Registry.LocalMachine.CreateSubKey(@"SOFTWARE\Microsoft\Shared Tools\Web Server Extensions\12.0\Secure\configdb");
DSN = (string) key.GetValue("DSN");
SQLServerInstance = new string[]
this.DSN.Split(new char[] { '=', ';' })[1]

WARNING : Do not make any changes in the registry without taking proper backup


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