Hello,
I don't remember needing aspnet_regsql utility for installation purposes... I installed in order of SQL, VS.NET, and that worked fine for me. I did get SQL express to install, but now I'm having problems connecting to it, for some reason. I think at first I left out SQL express, but went back to install it when only SQL express was the only option for the provider framework (at least through the wizard).
I've used it (indirectly; through the web admin tool) to setup the provider, but I haven't used it for setup purposes; are you having problems with SQL because it says that you can't install with other instances of SQL on? I've had that before; the SQL install is very particular. In fact, because of some problems with previous releases, I have a separate machine that I reformatted and put the software on. So I've installed from a clean install.
I don't know if this helps.