OK as i said above that error was solved, anywwasy my Server 2003 R2 license was blocked by MS(long story) SO i got my legal Server 2003 standard up and running now i have this problem:
Windows update loops on checking for updates and it never finishes. I have the latest windows update agent, IE8(with the latest cumulative update),TLS 1.0 enabled SSL 2.0 and 3.0 disabled, still the probelm never goes away I would really like to get it working as im going to migrate my site from xp to server 2003 and i want to be upto date on it