Problem upgrading from 1.0.3 to 1.0.4

I've problem upgrading from 1.0.3 to 1.0.4. After unzip the server packages to the web directory, it prompts me to configure web server, when i come to the page to connect to database. I got the below error after entering the login credentials. FYI, i am running on MSSQL Server 2008 Express Edition. please advise what to do the next.

"The existing version of the database cannot be used with this version of WebIssues Server."