SBS 2003 Console does not manage update after installing WSUS 3 SP1

If you make a change to WSUS administration console or update the software to WSUS 3 it will stop the SBS console reporting the status of updates on your network.

The following things can disable updates on the console

Under Automatic Approvals, the Default Automatic Approval Rule is enabled in Options.
Under Products and Classifications, All Microsoft Products is not selected in Options.
Under Synchronization Schedule, the Synchronize manually option is selected in Options.
Under Computers, the Use Group Policy or Registry settings on computers option is enabled in Options.
The Update Services service is stopped.

If these conditions do not apply, the Approve for Detection setting may have been disabled when you upgraded to WSUS 3.0 SP1. However, the option to change this is not available after you upgrade to WSUS 3.0 SP1. In this case, you must use a script to change the Approve for Detection setting.

Download the following file or copy and paste it into notepad and rename it to fixr2.sql Click here for fixr2 and copy to local c: then

Open a command prompt

Navigate to %programfiles% \Update Services\Setup

At the command prompt, type the following command, and then press ENTER:

executesql.exe -S MICROSOFT##SSEE -i C:\FixR2.SQL -l C:\Output.log
This was taken from Microsoft KB945985

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