Michael,

In my code I am not specifying paths for MDF and LDF files. I am just using 
tag to create DB. What confuses me is that this same code works on Windows 7
machine and not on XP. I installed SQL Express on XP box is same way as I
did on windows 7. 

Also,
SQL Server Express will be installed on users personal computer and no DBA
to maintain it.
WIX msi will be creating database in SQL Express so I believe that it will
create files in default locations.

Any further suggestions please? Thanks!

Attaching my .wxs code herewith: 
http://windows-installer-xml-wix-toolset.687559.n2.nabble.com/file/n6177061/CreateDatabaseScript.txt
CreateDatabaseScript.txt 

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