Do NOT install WSS SP1 with Automatic Update
Be very careful when installing Windows Sharepoint Services Service Pack 1. Especially make sure it's not installed as an automatic update on the server. Doing it wrong might result in
Exception from HRESULT: 0x80040E14.
Troubleshoot issues with Windows SharePoint Services.
Troubleshoot issues with Windows SharePoint Services.
HTTP 500 - Internal server error
The problem is also popping up in newsgroups. This problem might be caused by installing with the wrong identity. The SP1 install performs updates to the SQL Server of the Sharepoint installation. If the automatic update service installs SP1 under an identity that doesn't have sufficient rights to perform updates in the database the installation will still seemingly succeed with these messages in the eventlog.
This is why Microsoft posted a KB article on the subject. The resolution in the article is designed to push the updates to SQL Server manually, but it fails to stress the importance of running the right identity when doing so, because, again, you won't get an error message.
Still waiting for confirmation that performing this procedure under the right identity resolves the problem.
UPDATE: The issue was resolved this way!