Hi,
I know some applications put there database in the App_Data folder, but thats not something I do or have knowledge about. The error seems to indicate a version conflict like the db was maybe created in SQL 2008 Express and the server is running 2005, or something like that,it could be different levels of service paks in 2005. In any case I can't help much with that kind of connection, it may be possible but its not something I have knowledge of or experience with. I just use normal sql connections with server name, dbname, user, and password. Usually hosting companies provide a way to create a database and get the needed connection info.
Best,
Joe