Contributed By: Cliff Hobbs [MVP SMS]
Reproduced from the Microsoft Software Update Services: Frequently Asked Questions web page:

http://www.microsoft.com/windowsserversystem/sus/susfaq.mspx#top

"This can occur if the original setup for SUS 1.0 was done by running the MSI file directly from the Internet, instead of saving it locally and then running it. When the SUS with SP1 setup attempts the upgrade, it must read certain information from the previous MSI installer before proceeding. To fix this issue, you should uninstall SUS 1.0 and then re-install SUS with SP1.

The following steps help make the uninstall/re-install easier. Completing these steps will prevent the need to re-download all updates, will preserve the previous sync and approve history, and will also retain the list of currently approved updates so that the SUS administrator will not need to determine what has already been tested and approved.

1. Copy the contents of the \SUS\Contents\Cabs folder to a back-up location.
    
2. Copy the following files to a back-up location:
   
   • \wwwroot\approveditems.txt
   • \wwwroot\autoupdate\dictionaries\approveditems.txt
   • \wwwroot\autoupdate\dictionaries\settings.txt
   • \wwwroot\autoupdate\administration\history-sync.xml
   • \wwwroot\autoupdate\administration\history-approve.xml
    
3. Uninstall SUS 1.0.
    
4. Install SUS with SP1.
    
5. Copy the files and folders that you backed up to their original locations.
    
6. Restart the WuSyncService by following these steps:
   
   • Run Services.msc from a command prompt.
   • Locate Software Update Services Synchronization Service.
   • Right-click, then choose Properties, and then choose Restart.
    
7. Open the SUS Admin page, and then verify your settings and approved items.
    
8. Synchronize the SUS server."