SQL Server Compact edition is also an option - http://www.microsoft.com/Sqlserver/2005/en/us/compact.aspx
Deployment is pretty easy using ClickOnce or by copying the engine dlls to the application directory.
I would choose SQLite. You can get the ADO.NET Compatible driver here:
System.Data.SQLite
I'd say SQLite. It's incredibly light-weight and easy to use, and the API is fine. You could always use DbLinq as ORM.