Well ok, SQL 2005 Server Express is a good starting point. You could use Access, MySQL, or Oracle as other possible databases. Depends on your knowledge and experience. Knowing the differences between T-SQL and PL-SQL is also something to consider. For the size of the setup you are describing I suggest SQL Server (express may be limited), MySQL or Oracle.
Creating the database is kind of general term. Basically when you create a database, you need to create tables and their structures, relationships between tables, and indices (if required). CREATE TABLE statements are easily done through Visual Studio.
In the IDE you should see a tab next on the left handside (may vary depending on your layout type in Visual Studio 2003 that you have chosen) should show a server tab. Clicking on that should display all list of servers (probably 2005 express in your case) running on the system that you can interact with. As well you can right click and add a new server or a specific server table connection.
From there you will have a set of folders/icons that show things like databases (ie. Northwind, Pubs, etc), tables, stored procedures, functions, etc that are part of that database server. You can right click on the tables section and choose new table and Visual Studio will provide you with the basic table structure statement. This is the same for creating Store procedures, relationships, etc. Hence why Visual Studio is called a Rapid Application Development environment (RAD).
unfortunately there is no "template" you can use to build the database tables / relationships for you. Because your application will with out a doubt call different tables, columns, and stored procedures. So you have to build your db from the ground up and then build your application.
Note: Application development procedures - Define explicitedly what the output /results will be of the application. Define how the application will look, operate to produce those results / outputs. Then build the database to store the data required to have the application function inorder to produce the output desired.
Make sense?
Hope this helps.