Okay I must be doing something very wrong at the moment then!
I get this error
It is an error to use a section registered as allowDefinition='MachineToApplication' beyond application level. This error can be caused by a virtual directory not being configured as an application in IIS.
Here is what I did I extracted the file to the Inetpub wwwroot folder I set it up as a application in a virtual directory.
I am using Visual Studio 2008 and SQL 2008
I followed all the instructions for the set-up for the DB as per the read me file.
Any ideas on what I am doing wrong?