Refer: http://cosier.wordpress.com/2006/7/3/moss-2007-upgrade-error/
If you receive the following error during a SPS 2003-> moss 2007 upgrade:
"Failed
Start the Database Service MSSQL $ officeservers. repair this product
Using Add/Remove Programs"
The chances are that you have selected an invalid option during configuration. when you first configure the product on a machine that is running a previous version, you will be asked if you wowould like to perform a gradual upgrade, an in-place upgrade, no upgrade. if you quickly choose one of the options and click Next and you are already running SQL Server 2000, you will more than likely run into this problem.
In order to fix this problem, perform a reinstall (Yes I know, it's a pain in the behind ). then next time around und, before clicking Next, click the second tab located into ss the top of the wizard. you will now see 3 more options, where you can choose to either do a 'complete' install, or the default which is 'stand alone Server '. the default option, just so happens to install all of the components and the database server (MSDE ). this is where I believe the problem is.
What it seems to be doing is trying to install MSDE, then it updates the internal service instance registry key to point to a services instance that does not exist (MSSQL $ officeservers ). I located the key, and tried to change it manually back to the correct instance, but I had no luck (perhaps you might, if you dare try ).
So:
Reinstall
Select 'complete installation (the first option in the List)
Click Next to continue the install
Now after your restart, when you re-run the Configuration Wizard, you will not get this error. It shoshould continue to play nicely
There's plenty more of these gotcha's which I will blog for you over the course of the next few weeks. I am currently doing a lot of work around und Migration, so if you have any questions just drop me a comment or an email.