Sorry, should have posted my own answer, but anyway. I was getting the same error, then I also tried to create my own DB names with scripts, but that was even worse results. I spoke to a friend and found that I had to add DNS service and add my FQDN to that internally before the Simple Install would work, that is what got that working.
I still would like to know how to build my own DB's and do the install manually, as I know I will have to use a full edition of SQL one day.