What does your test environment look like, if you don't mind sharing? Here is my experience.
I have tested this on ESXi and Workstation 7 with Server 2003 SP2 and SQL 2008 Express SP2.
With this environment, I have seen consistent install and upgrade failures. Typically the error code has something to do with a failure to communicate with the database. Further research has revealed this:
1. After the Server 2003 SP2 machine is built, I look at the Intel Pro 1000 NIC and the driver is from Microsoft and dated sometime in 2006.
2. I go to Intel's website and download the latest Intel Pro 1000 NIC driver (sometime in 2010).
3. Install the driver by running the .exe file.
Replacing this driver with one directly from Intel has increased my success rate of installations/upgrades to almost 100%. I would HIGHLY recommend that you take a peek at the driver version of your NIC and see what the date is on it...
Just a thought...:)