Hi,
Since you are using SQL Server 2005, you can upload your database file to server and attach it to host server's SQL Server, and then change your ASP.NET application connection string.
You can also use Database Publishing Wizard to create .SQL Installation Scripts for your Database and then use this .SQL files to create your remote databases on the SQL Server. Besides, you need to change the connection string in the Web.config. For more information about connection string, see http://www.connectionstrings.com
For more information, see (Deploying a SQL Database to a Remote Hosting Environment) http://weblogs.asp.net/scottgu/archive/2006/12/22/recipe-deploying-a-sql-database-to-a-remote-hosting-environment-part-1.aspx
If you want to use Web Setup project to install website, you can create custom action to create new Database while installing. To do so, you need to create a text file that contains a SQL statement to create a database and need to know the connection string used to connect server and the user should have proper permission on server, and then you can execute SQL statement to create database in custom action.
For more information, see http://msdn.microsoft.com/en-us/library/49b92ztk.aspx
I look forward to receiving your test results.