Hi Carl,
Are you running SEP 11 or SEP 12? SEP 12 is especially designed for Small Business Servers. I have it running on my Windows 2008 SBS without any difficulties, though as Vikram noted above SEP 11 RU5 should work fine as well.
I recommend checking the SEP client logs. Often times, there will be listings there about what has gone wrong in communciation.
Thanks and best regards,
Mick