You have to love new products. Many sleepless hours.
Another issue that I have found with WSUS is that if you install it on a SBS2003 Box, that already has SQL installed (Premium Tech). Then the installer will get to the stage of setting up the MSDE instance, then start to roll back and fail.
The workaround for this is to download MSDE from the Microsoft site and install an instance manually. Then setup WSUS again and use that instance.
This may sound messy, and you are probably wondering why you would use MSDE when you have SQL already installed? Well the answer is simple for me. I am more than 400 miles away from the client in some situations, and setting up MSDE by downloading it is far far easier than trying to explain to my clients to put the correct SQL disk in the drive 😉
If I get a fix from MS, I will post it here.