You can take your pick. Backup Exec will run with it's database in SQL 2000 Server, SQL 2005 Express, or SQL 2005 Server. Take into consideration that if you need to restore an entire instance of SQL, Backup Exec of course needs to have its database outside of that instance. This can potentially be a problem any time you put the Backup Exec database into a production instance of SQL. While it will take more space and more system resources, I would recommend letting Backup Exec install its own instance of SQL 2005 Express.
Russ