This method works, but down the road you're probably going to want to
reinstall MOSS. When you install MOSS with a Basic install not only
does it install SQL Express, it also does a bunch of other tweaks, like
limiting the number of threads it uses to access SQL. It also runs
everything as internal accounts like Local System and Network Service.
Once you get your data out of SQL Express and into a full SQL product,
I'd recommend uninstalling MOSS and reinstalling as an Advanced install
to clear up some of the other issues.

I have successfully moved the
content db from MSDE to a fully blown SQL Server 2005 and I can access
SharePoint. There are a couple of issues though. I'll jes list the 1 I
really wanna get rid of straight away with your help of course.

Problem:

Login prompt - there is always a login prompt every time I access a
website whether it be SharePoint or just an ordinary HTML/ASP page set
up on the server. This is only happens when I enable BASIC on IIS but I
am still able to access SharePoint after giving it a my domain account
and password. But when I enable INTEGRATED AUTHENTICATION, I get the
usual 3 login prompts and then I end up with the "HTTP Error 401.1 -
Unauthorized: Access is denied due to invalid credentials". What is the
difference between setting the Authentication type for SharePoint during
the Configuring the server setup and the Authentication on IIS? Will
setting up an SPN be the solution to fix this? i.e. enable Integrated
Authentication and the login prompt disappears?

Several quick points.

There is no difference between setting the authentication type when creating a
site collection versus changing it in IIS manager later. SharePoint doesn't do
Authentication it looks to IIS to handle either windows Integrated or Basic.

The presence or absence of a login prompt when using Windows Integrated
Authentication is based on the Security Zone settings of the client. If the
SharePoint website is part of the Local Intranet zone or Trusted Sites Zone
(after the modification of the Trusted Sites zone settings to pass credentials)
then the user's logon credentials will be passed by IE in the background. I
suspect that the client you are using is seeing the address as part of the
Internet Zone which doesn't pass credentials.

SPNs are only needed if you are using Kerberos Authentication in your network.
If you are then this could be a possible solution since Basic doesn't use
Kerberos, but Windows Integrated does.

I'm assuming your SharePoint server is a member of the domain and is NOT the
Domain Controller. As I remember there are issues running MOSS directly on
Domain controllers. If it's a DC or not a member of the Domain at all that
could also be the source of your problem.