This post disappeared from a previous blog of mine so I'm reposting it.
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I've installed BizTalk 2004 on a developer workstation several times at this point. For a developer workstation I recommend the following:
1) If you do 'regular' ASP.NET development on your workstation and you will continue to do so after installing/configuring BizTalk then when you are configuring Windows SharePoint Services (WSS) do not configure it to use your default website. Create a second website in IIS and point to this site during WSS configuration (and later during BizTalk configuration point to this site instead of your default web site for the BAS site location.) If you don't do this you will have to put your ASP.NET applications on a second website that doesn't run on port 80 or you will have to configure WSS to not 'apply' to each Virtual Directory that you want to use for ASP.NET applications.
2) I have never succesfully been able to create the WSS configuration db from the WSS configuration wizard. I always get an access denied error when it tries to create the configuration database, complaining about NT Authority\Network Service not having appropriate access to the database (or something like that.) Instead, I create the WSS configuration database prior to configuring WSS using the Using the Command Line to Create or Connect to a Configuration Database section of the Administrator's Guide for SharePoint Services. This section describes how you can use the following command to create the config database:
stsadm -o setconfigdb -ds -dn
You can then point to the database you created with stsadm during the WSS configuration.