Last night I was trying to install Service Pack 1 for Windows 2003 on our main developement server — it took three (3) hours to finally get it installed. I had the problem where it was hanging on the step “Backing Up Registry”. It did this to me twice, I tried rebooting, shutting down services — you name it. I finally came across the answer: Turn on MSDTC service (Listed as “Distributed Transaction Coordinator” in your service listings — in case you didnt know). DTC wouldnt turn on so I went to the command prompt and ran “msdtc -resetlog”, then the service started just fine. Also the install went just find after that point.
Why DTC is required to install 2k3 Sp1 — I dont know, and I’m sure we will never know. As long as the install works, I’m happy.