(this is just too long for a comment)
Postgres works very well on a workstation - it also works very well on the server.
You should be aware that Postgres, being a full blown server DBMS does require some kind of installation - and it requires to start the server process in order to use it. You don't really need a Windows service and you can start and stop the server from within your application (by calling
For our development team I have prepared a little batch file that gets a Postgres server up and running from the ZIP distribution without any installation hassles. Something like that should be suitable for your needs as well). If your are interested, I can add it to this answer.
Although I really like Postgres (and would chose it over SQL Server any time), I agree with dezso that an embedded engine like SQLite (or even SQL Server CE) might be more suitable, due to smaller installation requirements (and thus less possible problems). But they are less powerful as well.