As well as SqlCE, there is SQLite[^], which is also a file based db system. I have used this in the exact same scenario which you have related. SQLite has a fully functional ADO.Net implementation[^], and can be embedded in the application if necessary, which means less install hassles. It is also open source, with the source code in the public domain.
When I was a coder, we worked on algorithms. Today, we memorize APIs for countless libraries — those libraries have the algorithms - Eric Allman