I was simply using the debian package manager version, seams to work file for what I need. 

>is version of freeradius supplied by distro or package manager?
>
>have you uncommented calls to sql - eg in the default
>server or inner-tunnel  (look in the required/needed sections, eg
>authorize, authenticate etc).  i also note you dont have SSL
>support so wont be able to do any EAP stuff.
>
>alan


That was exactly the problem, none of the docs mention that file which is why I missed it. 
>Part way through, it says:
>
>Edit /etc/raddb/sites-available/default  ...
>
 >You didn't do that.

>># /usr/sbin/freeradius  -X
>>FreeRADIUS Version 2.0.4, for host i486-pc-linux-gnu, built on Sep  7 2008 at 23:35:34
>>Copyright (C) 1999-2008 The FreeRADIUS server project and contributors.