There's some fundamental issues here, and I don't see any way through them without doing some
basic review:
Microsoft SQL-Server is a database. Management Studio is an administrative client to SQL-Server.
Microsoft publishes a library so that other clients can connect to the database server as well. At no
time will any other client, like ArcGIS or ArcSDE, connect to Management Studio. Management Studio
is used to configure the database, so that users exist for clients to connect, but it has no role in the
clients' connections to the database server, and it is not possible to use it without a database server.
There are a number of different versions of SQL-Server. Microsoft has chosen to split the capability
of their core software into "Enterprise", "Standard", and "Express" classes. They also have the "old"
release (2008) and the "new" release (2012). While you can chose the database you want to use, you
can't control the ability of older software clients to work seamlessly with newer servers (sometimes
the new servers will permit old clients, but it's rare that there's any way for the old client to access
new capabilities). It would be unwise to assume that you could use 2012 Express with ArcGIS 10.
ArcSDE is a "middleware" component -- it acts as a server to clients at the same time it acts as a
client to a database server. The technology of the ArcSDE middleware has also been configured into
a DLL which can run inside a client, which allows a client to be it's own server, and talk directly to the
database (this is called Direct Connect).
Esri also exploited opportunity presented by the existance of SQL-Server Express to provide "Personal
ArcSDE" and "Workgroup ArcSDE" products. These technologies are closely coupled to ArcGIS, and
don't really have much to do with the capabilites of Enterprise ArcSDE -- the connection protocols are
different, as are the administrative tools.
ArcGIS 10 also added a capability for clients to connect to spatially-enabled databases directly, without
using ArcSDE (aka "Query Layers").
It is not, however, possible to mix-n-match the protocols so that you can use a 2008 Express-specific
client to talk to a newer release of the database with an ArcSDE query layer.
I suggest you choose one technology, and explore its capabilities and limitations before trying to integrate
any other similar technology into your environment. If you work chronologically, you'll have less trouble
(and by the time you reach it, the newest ArcGIS may be able to talk with the newest Express).
- V