I appreciate you guys looking into the issue.
Due to time constraints, I may be attempting a resolution, which others may find interesting.
Ed, I would be interested in seeing what you think of the plan (and correcting me if there's an issue I don't see).
1) Put all Exchange services on manual.
2) Rename the domain to "current.something"
3) Install SP1 without launching the Exchange services.
4) Rename the domain back to "current"
5) Restart the appropriate Exchange services
The domain is question is below
1) 1 Root Forest/Domain - WS2K3 R2 DC's
2) Forest is a single-label domain
3) 1 Exchange 2007
4) No Exchange 2003
My direct is J LATOISON at THEHIERARCHY dot NET