And not just mine - several other hosts had the same problem.
After a lot of hullaballo and confusion we've got the mess straightened out.
- One host was missing NIC cards in it's control panel
- Operators reported being asked to install software
- Operators reported being asked to run chkdsk
- Many many services were off
- Could not view events in Event Viewer - double click on 'em and they just glare at you insolently.
- Could not launch services in Services Manager
- Login as an established user and ... greeted with the 'first time login' nonsense
- The applications - 3rd party non MS stuff - would not launch and claimed they were not registered.
Most of the hosts were fixed by Resting the security settings to default . One host would not boot following this fix and was restored from snapshot.
The only commonality we can find is Server 2003 SP2 and IIS  and they were all VMWare ESX guests.
What in the ring-tailed rambling heck?
 Amusing conversation with a vendor about that point:
Me: Why does your application require IIS?
Him: Our application doesn't use IIS.
Me: Well it won't install without IIS being on the box.