Cannot open database "aspnetdb" requested by the login.

When I go into VS2005 - website administration tool / Security I get the
error:
"Cannot open database "aspnetdb" requested by the login. The login failed
for user xxxx\ASPDATA"

SQL Express 2005 is installed - I generated the aspnet database from
aspnet_regsql.exe. The aspnet database didn't get uploaded to the App_data
folder yet. I'm using impersonation to access other tables so this is
picking up that line in my web.config file - which is ok. ASPData is the
dummy account set up on the system and is used in other .Net apps to update
tables with. (And it works)

Web.Config file has this line:
<clear />
<add name="LocalSQLServer"
connectionString="Server=.\SQLEXPRESS;Database=aspnetdb;Trusted_Connection=Yes;" />
<identity impersonate="true" userName="(E-Mail Removed)" password="xxx" />

In IIS Manager - under ASP.Net tab - Configuration Settings it has this string
data source=.\SQLEXPRESS;Integrated
Security=SSPI;AttachDBFilename=|DataDirectory|aspnetdb.mdf;User Instance=true

ASPData has permissions to read/write/modify to the c:\Program
Files\Microsoft SQL Server\MSSQL.1\MSSQL\Data

I opened SQL Express Mgr - and set up a login & permissions for aspData with
all the rights of "aspnet_?" plus dbReader & dbWriter in the role membership
for the aspnetdb. It's still not working.

Any ideas? I'm lost now.
Jess