Typical installation for SharePoint Services 3.0 will install the database as an Windows Internal Database, this is not good if you need to scale out for performance. After many times of trial and error finally get it done. Below is a simple step on how I did it.
Install WSS 2.0 by following the Remote SQL Server deployment guide. After this step I had my WSS 2.0 running in one box and sql server 2005 on another box.
Perform an inplace upgrade from WSS 2.0 to WSS 3.0 by executing the SharePoint.exe (make sure you had install the .Net Framework 3.0). Before you start the SharePoint Products and Technologies Configuration Wizard make sure you execute the prescan.exe which is located in the C:\Program Files\Common Files\Microsoft Shared\web server extensions\12\BIN folder. The full syntax is;
Note: I am not able to install on a separate instance of SQL Server. Why it tooks me many step before I can achieve this is probably cause by separate instance I used during the installation. Previously I install WSS into a separate instance of SQL which mapped to port 1633 give me hell of problem.
I think it's possible to install a fresh WSS 3.0 with SQL Server, just select Web Form during the installation and follow all the on screen instructions.