i created a program for network chat in C # with sql server 2005 database.Here.. i created two setup files.One for Administrator systm and another for client system. Admn sys contains sql database and all stored provcedures.And i installed sql servr in admn systm. Client systm is just accesing admin sys and database (located in admin sys) for all purphose using connection string.There is no any other sqldatabse in client system.so should i need to install sql server in my client system? plz reply me.i'm using Windows 7.

Why would you need a database at all for only chat application? As somekind of a log?
Instead of that, you can simply use file (write to file).
Anyway, if you have decided to use db, it can only be on server side. But I am not really sure why you need db at all? If you explain why you need it, I can give you further information.

btw, what method have you taken for server-client?
Iam doing almost the same application, andI choose TpcListener and TcpClient (using ip). And I have problems. I am just wondering what type of connection have you taken!?