I am starting one POS (Point of sale) project. Targeting system is going to be written in C# .NET 2 WinForms and as main database server We are going to use MS-SQL Server. A
I would suggest Sql Compact Edition as it's lightweight and free, so it solves two of your three problems. I have no idea if it works on Mono.....
I've used it in the past, and I was actually quite impressed with the performance. The one big drawback is the lack of stored procedures...