Sorry if this is a duplicate, I'm sure this will have been answered before but I just can't find it.

Is there any need to use any of the paid version of SQL Server or will the Express version suffice?

If Express is good enough but there are functional benefits to using another version can you let me know?

Would also be interesting to see what most people use?

Depends on the forum load. SQLExpress is a 'query-throttled' version of SQL Server -- so under HEAVY (and I mean heavy) loads, you will see slowdown from the SQLExpress. I have a particular server that we use for 'cheaper hosting solutions' for some of my clients - and we have about 60 sites on that server, some of which all share the same SQLExpress instance, and they run fine (a couple are kinda heavy but no complaints and I haven't seen the governors kick in much)

Additionally, SQLExpress only includes "Full Text Search" support if you install the Advanced Tools version of it. If you use the minimal standard version of SQLExpress, FTS is not included. This is not a show-stopper but can affect search performance.

I have a site with approx 200,000 posts, and about 50 continual active users not conting guests and it runs like a champ on SQLExpress --

Compatible SQL Versions for YAF = SQL 2005 (Standard, Enterprise, or Express) and SQL 2008 (Standard, Enterprise, or Express) - this includes R2 releases of both. I am not 100% sure if SQL2012 is supported but have not heard of any show stoppers on it. With modification, SQL Azure is possible but not yet 100% supported.

Support for SQL2000 has been dropped effective YAF v2.0 (including betas)

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I use SQL Server 2012 Standard Edition, both for testing and on the live forum site.

Works absolutely fine.

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YAF 2.0 should support all versions beginning from MS SQL Server 2005.

2012 is surely supported too. The last version that supports 2000 should be 1.9.6.1.