Deja Vu with the WSS 3 Updates. Our support teams tell me of at least three SharePoint failures today. This must now be at least fourth time, that I can think of, a Windows Update has applied a patch to SharePoint Services v3 (there are still a lot of them out there) that it doesn’t recover from. You seem to get a mixed bag of results dependent upon what Operating System and what SQL version was used and various other factors.
As a general guide we see many SharePoints that just carry on working, several that need Product and Technologies Config Wizard (PSConfigUI) run and a few hardcore ones that need more help. As a general rule, if SharePoint was installed with SSEE/SQL Embedded/Standalone option it will fall over after some updates. Running Product and Technologies wizard on its own won’t help as that will fail as well. If you are in this situation, try following Article ID: 944154 it should get you back and running.
You always need to consider which database engine you are installing with. SSEE will mean that you don’t have a database size restriction but it comes with a bunch of problems and issues that you also need to be aware of. Remember with SQL 2008R2 Express Microsoft increased the size limit to 10GB. Express edition has some of the drawbacks of embedded but it makes several of them go away. If you are anywhere near that size for your content databases then you really should consider the features of Workgroup or above.
The GroupBoard Workspace template that Microsoft produced for WSS3, really seems to add to these woes