PROBLEM:
While installing a new environment today, I changed the "Database Default Locations" setting in SQL Server 2005 to make sure the database files and log files were created on a certain location. Testing by creating a database manually in the SQL Management Studio worked, but when I ran the SharePoint Configuration Wizard the databases were created in the old location.
CAUSE
After some troubleshooting I found out that SharePoint somehow retrieves the old setting until SQL Server 2005 has been restarted (reboot of the server or restart of the services). Why this is I have no clue.
RESOLUTION
Just restart SQL Server 2005 and try again. The new databases are now created in the correct place.
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