"The official way to pronounce MySQL is 'My Ess Que Ell' (not 'my sequel'), but we do not mind if you pronounce it as 'my sequel' or in some other localized way."

http://dev.mysql.com/doc/refman/5.1/en/what-is-mysql.html

I only ever use MySQL, so have always said "Ess Que Ell". I work with guys who say "sequel" by default.... it's not caused any friction as yet.