Hi,
The most likely cause of this is if your SQLExpress is only configured for Windows Authentication. You can change it to Mixed Mode which allows both windows and SQL users. Then if the sa user exists you can set a new password on it and then the web app installer should be able to work. If you have troubole configuring the sa user, just create a new SQL user named admin and add it to all the server roles under the Security node in SQL Management Studio. Then you can use this new SQL admin user instead of sa.
If you want to work in Visual Studio, I recommend you use the source code download which has a VS solution. You can also run the deployment package (which is pre-compiled and has no C# code) in VS, but the advantage of working with the source code is there are code examples for almost ay common task you want to do by looking at code for existing features.
Hope it helps,
Joe