After the v10.5 install in 2010, the detection servers were hardened, and some permissions were changed for folders.
When performing the v11 upgrade in June of 2011, the servers seemed to upgrade fine but then could not start File Reader.
Logs indicated that folders could not be found: pstdepositfolder and pstlocalcopy. The installation / service start could not create these folders because of missing permissions.
The special permissions that were removed, that are critical for an upgrade/new install to complete are:
1: [[machine_name]]\users; + ALLOW: Create Files / Write Data
2: [[macine _name]]\users; + ALLOW: Create Folders / Append Data
Once these permissions wer re-added, the installation completed and file reader was able to start normally.
I hope this helps anyone that may have issues in the future with missing permissions on detection servers.