I finally gave up on trying to tweak Sharepoint to work and starting the process of re-installing. Guess what! The reinstall fails. It doesn't create the two databases. Maybe I am missing something? So I have downloaded STSV2. I think I will try to stuff it directly into a new SQL Server instance rather than go through MSDE first. I want to put the sharepoint databases on a seperate partition.
Along the way I downloaded the web version of SQL Enterprise manager. To get it to not ask me for my userid I had to give NETWORK SERVICE full access to the Microsoft.Net\Framework\v1.1.4322 directory. I was trying to view my MSDE instances. It didn't help. My problem was that I was entering the server name incorrectly.