SQLite vs SQL Server Comparison
SQLite is a tiny database that is specifically designed for embedded use. It is a single-file database that is deployed side-by-side with your application. If you have to write an application that needs just a limited set of database functionality, then a tiny SQLite library has a big advantage over SQL Server of not having any dedicated installer. Basically SQLite is just a simple DLL file that is deployed with the executable of your application. It can be even compiled in your C/C++ application, as SQLLite is distributed in a form of single .c file (called "amalgamation"). Also, SQLite comes completely free of charge.
SQLite also runs in-process and reduces a lot of the overhead that a more advanced database like SQL Server brings: network connections, user access checks, services, licenses. All data is handled inside your process solely for your application.
SQLite is generally a lot faster than MS SQL Server if dealing with small-size databases. SQLite can be integrated with different programming languages and environments including .NET.
However, SQLite has poor support for multi-threading. It only supports a single writer process at a time, all other processes are locked at the file level. This means that SQLite locks the entire database when it needs either read or write from a single table. This isn't a problem for small and simple applications, but if you have a higher volume of writes from different users then it could become a pain.
Also, SQLite has reduced types of support compared to SQL Server, worse support for data precision, query language, checking constraints etc.
Choosing MS SQL Server vs SQL Lite depends on the complexity of the application itself. For small embedded databases the best choice is SQLLite to keep the application small. But for large-scale databases with multi-user access, the best choice is SQL Server.