July 10, 2011 
I ran into a situation today where Azure Storage Emulator won’t start. Despite attempting to start the Storage Emulator from the system tray nothing happened – no error, no indication of a problem, nothing.
I attempted to start the Storage Emulator from: Start Menu -> Windows Azure SDK v1.4 -> Storage Emulator. The Azure SDK command prompt opens and informs me its attempting to start the Storage Emulator but a red text message flashes on the screen and the command window closes.
Getting to the bottom of this is not a big deal, in fact its worth considering just using the Azure SDK Command Prompt instead of the above “convenient” controls.
Open the Azure SDK Command Prompt from the Windows Azure SDK v1.4 directory (or Start Menu). csrun.exe is found in the bin directory. Change directories then execute csrun /devstore:start.
After several moments, we finally get an error message that sticks around long enough to give us a clue. As it turns out, the message is quite useful even! In my case, I develop in a virtual machine and so I tend to keep things off if I’m not using them. So, I only keep SQL Server R2 running, and leave EXPRESS and 10.0 off.
The fix is easy enough, open up SQL Server Configuration Manager and start SQL Server Express. Once the SQL Instance is running, starting the Storage Emulator by any of the methods mentioned prior will work without a hitch.
Well, hope that was enlightening. Its pretty easy to work directly with Azure SDK via the Command Prompt.
Software Engineer, data enthusiast, math literate and all around technology nerd
The B^2 Brand 
Given that I know nothing about Azure’s environment, take this with a grain of salt, but
since you already have SQL running, I’d migrate the contents of your EXPRESS instance to a separate instance in your existing SQL Server 08 R2 instance. Less parallel copies of SQL you have to run to make life happy.