One of the things that was very easy in SharePoint 2007 was installing SharePoint with a local account to the default instance of a database. This is not the case in 2010. I won’t say its hard but its not straight forward.
If you try to install SharePoint as part of a server farm using the Complete install method where you have not created a configuration database first and try to use a local account as the service account, you will get an error “The specified user xxxx is a local account. Local accounts should only be used in stand alone mode”
There are a couple of ways around this. You can change some registry settings and update the server configuration a bit once the install is complete with a domain account. But what happens if you don’t have a domain account to install with. Well enter PowerShell and the cmd-let New-SPConfigurationDatabase.
You will need to run the SharePoint 2010 Management Shell as an administrator and using the command let New-SPConfigurationDatabase. Enter the name of the database you want to create and the name of the server. Now enter the name of the user account you want to create as the farm admin making sure that this account is a member of the local administrators group. Enter the final passphrase and press return to start the operation.
Once this completes successfully, you can run the SharePoint configuration wizard and it will pick up the database server and configuration database. Make sure you don’t disconnection from the farm.
Click next and follow the prompts to finalise the installation of SharePoint.
If you get an error about a non unique user, make sure the user is a member of the local administrators group. Close the PowerShell command window and reopen it and rerun the cmd-let.
Update: 01-06-2010: If you get an Access denied on the Wizard setup for the user that set up the installation and you are running on Windows Server 2008, close the browser and run IE again as administrator. The administrator credentials which are required to create application pools etc are not carried forward unless you do.