Keep in mind that the free version of SQL (2008 Express) is still limited to 1 CPU and 1GB of RAM. The only advantage (besides its being more robust in other areas is the 10GB vs 4GB.
I do not know this, but the database tuner would still need to tune all of your data.
I don't know what getting 2005 Standard with a much higher capacity for RAM is going to do for the size of your database.
One thing for sure is that AC is going to need to fix the database tuner issue, and will likely need to make future builds with 2008 Express if only for the size of the database.
I think with 17 workstations, a SQL version which can utilize more RAM from the server assuming that the server has 20 or whatever GBs of RAM, will help your performance issue.