A reboot from a previous installation is pending
And of course I’ve rebooted before this so I know there is not a reboot pending.
What there is, however, is stuff stuck in the pendingfilerenameoperations registry key.
If you remove the following key:
And of course this gives you such confidence:
But go ahead and delete it and start the schema update again.
And now we can install the service pack.
Remember you only need to do this if you previously installed SP2 for Exchange 2007. If you jumped from sp1 to sp3 that handles the schema update via the gui install just fine.