"the database is created in the proper location" How interesting as I am getting different results !

An internet search revealed that this is a bug in SQL Server that was reported by Aaron Bertrand, SQL Server MVP, on February 10th, 2010. To confirm, I re-ran the tests on two different windows servers, one server with only a named instance and the other server with a default instance and a named instance.

When creating a database on the named instance, the named instance's default file locations specifications are not read and one of two things happens:

a) If there is a default instance, the default instance's default file locations are used instead of the named instance's location.

b) If there is no default instance, the file locations are from the master database location of the named instance.

How nasty !