Here's the problem:
2010-05-10 16:51:57.393 ------------ Running Prerequisites tasks ------------
2010-05-10 16:51:57.398 Installing Microsoft SQL 2008 Express Edition ...
2010-05-10 16:55:35.716 Installing Microsoft SQL 2008 Express Edition ... done.
2010-05-10 16:55:35.716 Checking DB Connection (after downloaded install) ...
2010-05-10 16:55:53.030 Connection to BEISSNER-DT\SQLLANSWEEPER2K8 ... failed!; Connection string: Provider=SQLOLEDB.1;Password=mysecretpassword0*;Persist Security Info=True;User ID=sa;Data Source=BEISSNER-DT\SQLLANSWEEPER2K8
2010-05-10 16:55:53.030 ------------ Running Preinstall tasks ------------
2010-05-10 16:55:53.033 Removing older Lansweeper services, if exists...
2010-05-10 16:55:53.036 Removing Lansweeper database, if exists...
2010-05-10 16:56:09.777 Error: Dropping Lansweeper Database [DBNETLIB][ConnectionOpen (Connect()).]SQL Server does not exist or access denied
complete install.log attached