This has been followed up offline. I am posting here in case somebody else
is interested. This turns out to be an ACL issue. The backup directory used
here somehow does not have read access for the
Network Service role, in which the Windows Internal Database will be
running: Windows Internal Database is used here for upgrade if MS SQL 2000
or WMSDE was used .
This posting is provided "As Is" with no warranties, and confers no rights.
Use of included script samples are subject to the terms specified at