Just to get the clarification here… The WSS consists of 2 servers. The Windows 2008 x64 servers hosts the IIS (Front End) Portion of the Site. There is a 2nd server, Windows 2003, that houses the SQL Databases.
I attempted the install on the 2008 server under a Domain Administrator Account. This is the same account that was used to configure WSS 3 and is used to perform any taks in the Administration Site… thus the account is a Farm Administrator. The Install was also attempted by "Right Click > Run As Administrator" to remove any issues there.
Can you elaborate on what you think the issue is?