Question : Question about the setup of DFS-R and multiple namespace servers

I am confused on one portion of DFS-R.  I have 2 servers, server1 and server2.  server1 has the management console for DFSR and i have created a namespace (domain.local\Public) with server1(server1\public)  being the server.  This namespace has a folder on server1 added to it, and i added another folder on server2 and have setup replication and verified that it works.  

My question is: Is replication all you need for the fail over?  If server1 gets unplugged would their still be accessibility to the namespace?  I am confused on adding the second namespace server.  Do I also need to add server2 as a namespace server as well to also do the fail over?

Another question: Can DFS-R handle a directory with a SQL Desktop Engine directory?  Will DFSR handle a always used (during buisness hours) sql database file?

Thanks!

Answer : Question about the setup of DFS-R and multiple namespace servers

Yes the dfs "root" should also be replicated to ensure availability.

Your other question: no. Even if VSS manages to copy the file to the replica, there will be major problems if it fails over and even more problems if it fails back. DO NOT USE DFS for this, it is dangerous and will not work.
If you need redundancy in your MSDE, migrate the database to SQL Server 2005 (standard) and implement Database Mirroring, or SQL Server Enterprise for a full blown Cluster.