OK!

User instances are possible on MSSQL express edition only, so you cannot have .\SQLEXPRESS in LocalSQLServer connection string in your c:\windows\Microsoft.Net\Framework\v2.0.50727maching.config

You need that connection string to be valid to doASP.NET authentication.

Resolution is as follows:

First run aspnet_regsql.exe command-line tool (in c:\windows\Microsoft.Net\Framework\v2.0.50727) and it will create a database on your MSSQL (developer, standard... edition) server. The name of database is aspnetdb.

Next, change the connection string 'LocalSqlServer' in your c:\windows\Microsoft.Net\Framework\v2.0.50727\maching.config to:

<add name="LocalSqlServer" connectionString="Data Source=MYSERVERNAME;Initial Catalog=aspnetdb;Integrated Security=True" providerName="System.Data.SqlClient" />

Do not forget to change MYSERVERNAME in connection string