Thanks for your help. I finally got it runnning. I installed msde from the link that youn sent and installed it with the following command:

setup SAPWD="AStrongSAPwd" SECURITYMODE=SQL

One thing I found the reason I do not have a folder with $ sign in the name becasue this happen only if you want to name your instance of msde. if you are taking the default name then you do not get that folder, default instance name is always name of your machine, You can have only one instance with the default name per machine.

I belive that MSDE does not have foreign keys option..right?

thanks