In order to enable certain database functionality in the “Refresh” (v1.1) release of the Web Deployment Tool the Web Deploy UI in inetmgr took on a new dependency related to SQL Server Management Objects (“SMO”). In RTW (v1.0) you could do dbFullSql operations
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Read the complete post at http://blogs.iis.net/krolson/archive/2010/04/26/errors-related-to-smo-microsoft-sql-server-2008-management-objects-in-web-deploy-ui.aspx