I've lamented before on the fragility of Windows 2008 and installing SP1 is no different.

This MS technote outlines what to do if you install SP1 and end up with some boot up error like:

Fatal error C0000034 applying update operation xxx of ……..


Basically the issue involves installing the service pack with other updates. The contained vbs script in the the technote works on 2008 R2 servers as well. To avoid the issue install SP1 on it's own with no other updates.
Darren Duke   |   March 30 2011 08:45:12 AM   |    win2008  win7    |  
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1 - Sam       03/30/2011 9:55:41 AM

We were one of the first to be hit by this. Before MS published the Technote, and before MS even acknowledged a problem, there was a fix here, which while getting the affected systems working, put them in a "torn state" in which updates are not correctly applied ever again.

There are a lot of angry users here:

{ http://social.technet.microsoft.com/Forums/en-US/w7itproinstall/thread/1c9a7151-b48c-4a98-aae7-a4b82682ea8e/ }

and here:

{ http://blogs.technet.com/b/joscon/archive/2011/03/11/why-you-don-t-want-to-edit-your-pending-xml-to-resolve-0xc0000034-issues.aspx }

and here:

{ http://blogs.technet.com/b/joscon/archive/2011/03/16/new-information-on-error-code-0xc0000034.aspx }

We have about 100 machines in this state.