As Luke mentioned, you must use a restored copy of your 7.0 database.
So, in the following environment:
- 7.0 SMP with SQL off-box on SQL 2005 server
DB Name: Symantec_CMDB
- Windows Server 2008 R2 box ready for 7.1 SMP installation
You would back up Symantec_CMDB and restore it as Symantec_CMDB_71. Then install SIM on Windows Server 2008 R2, configuring SMP 7.1 and solutions, pointing to the restored Symantec_CMDB_71 database. The upgrade takes the Symantec_CMDB_71 database from the 7.0 schema to the 7.1 schema, and you now have two functional environments: SMP 7.0 SP5 using Symantec_CMDB database and 7.0 agents reporting to it, and SMP 7.1 using Symantec_CMDB_71 database with no agents reporting to it.
Once confirming the migration was successful and your 7.1 server is healthy, you'd begin migrating site servers and agents, repointing them from 7.0 to 7.1.
As far as what to do now, if you need to keep using 7.0 (recommended), restore your SQL database from backup as Symantec_CMDB_70 and reconfigure your SMP 7.0 to use this database. Or, turn off your 7.1 server and restore the database as Symantec_CMDB. You shouldn't need to repoint your 7.0 server in that case, making things a little easier.
Alternatively, you can start using 7.1. Clients can be redirected manually using the AeXAgentUtil.exe /server: command. But as always be sure to verify new server health and test agent migrations before doing anything en masse.
I certainly think it could be more clear, because I did the exact same thing in my pre-production environment. I remember glossing right over the word 'restored' and thought to myself, even after two readings, "How interesting that 7.0 still functions properly under the 7.1 schema, especially considering the changes to security and account management."
Turns out it can't. The reason why your 7.0 server isn't functional, among others, is that 7.0 used local security groups in Windows to determine security, while 7.1 uses accounts stored in the CMDB for security. The database does not believe anybody in 7.0 has rights for access.