The Official SBS Blog : Microsoft Exchange 2007 SP2 installation is blocked on Windows SBS 2008:
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.