3 machines out of 7 here

Maybe this is a clue:

of our 7 machines, 2 run 32bit win 7 pro - they upgraded OK

of the remaining 5 running 64bit win 7 pro, 2 upgraded OK

the ones the failed all had extra language packs loaded - that is the ONLY difference in software packages.

The language packs loaded were Chinese Simplified, Chinese Traditional and Japanese, all to support overseas projects. Our standard installs have only Australian English.

I have read on a few other sites that it looks like the additional language packs might be the culprit.

We fixed our machines using a WinPE boot CD and removing the 0000000000000000.cdf-ms statements from %systemroot%/WinSXS/pending.xml. Apparently MS tells us this will cause extra problems, but I only found that bit after I had 'fixed' our machines.

Thanks MS. All the goodwill I had towards Windows 7 and SBS2008 evaporated in one quick update.

I hate MS again now. Hating MS is cool.