The Official SBS Blog : Microsoft Exchange 2007 SP2 installation is
blocked on Windows SBS 2008:
http://blogs.technet.com/sbs/archive...-sbs-2008.aspx


Important update: Installing Microsoft Exchange 2007 SP2 on Windows
Small Business Server 2008 currently causes problems in some web
services of Windows SBS 2008 and requires manual steps to fix the
problems. A prerequisite check is deployed in Microsoft Exchange 2007
SP2 setup program for Windows SBS 2008 so that Windows SBS users will be
alerted and prompted before proceeding with installation.



Microsoft Windows SBS team is working on a Microsoft Exchange 2007 SP2
installation tool on Windows SBS 2008. The tool will automate the
Exchange 2007 SP2 installation with a better user experience. With this
tool released, users can download the tool to the Exchange 2007 SP2
setup folder and launch the SP2 setup from the tool. The tool will
remove the prompt, stop the FSE services, launch Exchange 2007 setup UI,
and then perform post-setup cleanup after SP2 installation is
successfully completed.

For users who want to deploy Exchange 2007 SP2 on their Windows SBS
machines urgently, manual steps are provided in KB 973862. However, we
strongly recommend users to leverage our upcoming installation tool for
a successful SP2 installation. We will inform you via this blog when
this tool is available.

Note: KB 973862 should be available next week.