You see it a lot in examples and I've done itt on some small projects, but for a larger project with multiple developers, does it really work well to put the database file (.mdf) in the project?
What is your "workflow" like with your database? Do you put the file in your project and check it in like everything else, or do you have a central database up and running that you all use, or what?
Made this community wiki since it doesn't really have a single answer.
Use the GDR R2 Database Project. Each developer makes changes to a local copy of DB and syncs version controlled changes to it. Incremental changes can be applied to production using the output artifacts of the GDR R2 database project.
Most of the time projects i've worked on have a database server with a production database and a few beta/dev databases, the development is done using the beta/dev databases.
A change to the connection string is all that's needed to switch between db's.