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The SBS Documentation Team and Susan Bradley have posted the resolution to the "unable to install WSUS" issue on OEM installs of SBS 2003:
http://blogs.msdn.com/sbsdocsteam/archive/2005/08/24/455956.aspx
and
http://msmvps.com/bradley/archive/2005/08/24/63985.aspx
To confirm you are experiencing this issue, two conditions must be true:
1. You must have an OEM install. If you installed off of retail media and WSUS is not installing on your SBS for any reason, I want to hear from you, but the fix above probably isn't what is preventing WSUS from installing.
2. Look at your WSUSCA_xxxxxx_yyyy.log in the \Program files\Update Services\LogFiles of your install drive. Affected machines will show an error similar to the following :
(Obviously, SERVERNAME, DOMAIN, and IWAM_OEM-MACHINE-NAME will be machine- and domain-specific).