Express is still SQL Server, has the same primary abilities and can easily be backed up and restored to Standard, Enterprise, etc when the growth requires it.
You can compare express with other editions at http://www.microsoft.com/sqlserver/en/us/product-info/compare.aspx
The primary difference is resource limitations.
Express can only use a single CPU, 1 GB of memory and the database cannot be over 10 GB.
Those numbers jump up fast on the other editions:
CPUs Memory Storage
Express 1 1 GB 10 GB
Workgroup 2 4 GB 524 PB
Web 4 64 GB 524 PB
Standard 4 64 GB 524 PB
Enterprise 8 2 TB 524 PB
Datacenter OS Limit OS Limit 524 PB
The other differences are related to more advanced features like High Availability, Replication, etc.
The reason why SQL Hosting jumps the hosting package price up so much, is they are paying the SQL Server licensing. MySQL, SQL Server Express, PostgreSQL aren't costing them money.