Ms Sql Mdf Database File Attached Vs Created On Sql Server

 Hi all
I have a question concerning sql database mdf files. In the old days I would user a ms access database. This file would be stored with the actual web files and would utilise a dsn connection. 
I have noted when designing with vwd 2005 express it allows you to use 2 methods of creating a mdf database. You can either create it as an attachment mdf or you can create it directly using sql manager.
My question is, if you create the mdf database as an attachement file can you store it in the same manner as if you where using a ms access database, meaning can you store it with the web site's files so it uses the file storage allocated size and then create a connection similar to a dsn (but for sql) to the isp's sql engine or does it have to be uploaded to the isp' s sql server.
The reason for this question is some of my customers do not want to pay the extra cost to have an sql allocation, however I do not want to go back to using old asp methods to create advanced sites as I prefer using stored procedures.

Any help will be appreciated