As far as I know this is not possible. You will have to install SQL server separately using the installers provided by Microsoft.
If you want something that works out of the box without installing anything then I suggest you use
http://www.sqlite.org/[
^]. There is a wrapper for C#
http://sqlite.phxsoftware.com/[
^]. I guess it should be relatively easy to move from SQL Server to SQLite using this wrapper.
-Saurabh