System.Data.SqlClient.SqlException: CREATE DATABASE permission denied in database ‘master’.

This means that the domain account you specified to connect to the SQL Server does not have permissions to create the SharePoint config database. So go to your SQL Server and add the dbcreator role to your SharePoint Service account.

Please don’t make the SharePoint Service account elevated to domain admin level in AD or SysAdmin in SQL Server! It’s not necessary!

Okay, so install Search Server 2008 Express edition on top of WSS 3.0. This upgrades the configuration database of the existing WSS 3.0 farm. (There are many ways to upgrade WSS 3.0 to have Search Server 2008 but what I was doing was upgrading an existing WSS 3.0 farm configuration database.)

SS 2008 Express installation ran fine without any problems. The Configuration Wizard launches after the installation and the Configuration Wizard ran fine too. Now, when you access the Central Admin for the first time after installing SS 2008 Express, instead of default.aspx at the Central Admin site, you get presented with the Search Server Wizard Page instead. It is http://centraladmin/_admin/SearchServerWizard.aspx. Here you can specify the databases and other setttings for your Search Server.

Well, if the SQL Server 2005 hosting the content and config databases is not SP2 or later, you will get the following error message when click the OK button at the Search Server Wizard page:

Search Server has detected that the minimum database server version requirement is not met. The computer that hosts the database server role must have Microsoft SQL Server 2000 with SP3a or later or Microsoft SQL Server 2005 SP2 or later.

The problem is the instructions for installing Search Server 2008 does not mention anything about making sure your SQL Server 2005 is SP2 or higher.

Lesson: make sure you have your SQL Server 2005 upgraded to SP2 or higher before you install Search Server 2008.