For anyone who doesn't already know this:

If you have an existing MSDE instance that was installed with the defaults, the password for the SA login is blank. When you try to upgrade this with SP3, it will fail, because it enforces password security by default. While there is a flag to turn this behavior off, a better solution is to set the password for MSDE. You can do this with the following command.

osql -E -Q"sp_password @new='myNewPassword', @loginame='sa'"

(BTW, _please_ don't use that line as it is. That password is almost as bad as blank. :-) )

The -E flag means to use a Trusted Connection (using Windows login security), and the -Q is the string that is sent to MSDE. If you have an existing password, it looks like:

osql -E -Q"sp_password @old='myOldPassword', @new='myNewPassword', @loginame='sa'"