The following sites helped me resolve the problem by changing a registry setting on the SBS2003 server.
the fix was to
1. Stop the ntfres service on SBS2003
net stop ntfrs
3. run regedit
change Burflags to D4 in this part of the registry
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Servic es\NtFrs\Parameters\Backup/Restore\Process at Startup:
Change the value of "BurFlags" to D4 in hex.
3. Start the ntfrs service
net start ntfrs
Scenario: You are doing an SBS 2008 Migration from an SBS 2003 domain. You’ve created your answer file, you’ve gotten partway through setup, but it seems to sit forever at this screen:
This is the error that was showing in the SBS2003 server File Replication Log
Event Type: Error
Event Source: NtFrs
Event Category: None
Event ID: 13568
Time: 1:29:33 PM
The File Replication Service has detected that the replica set "DOMAIN SYSTEM VOLUME (SYSVOL SHARE)" is in JRNL_WRAP_ERROR.
Replica set name is : "DOMAIN SYSTEM VOLUME (SYSVOL SHARE)"
Replica root path is : "c:\windows\sysvol\domain"
Replica root volume is : "\\.\C:"
A Replica set hits JRNL_WRAP_ERROR when the record that it is trying to read from the NTFS USN journal is not found. This can occur because of one of the following reasons.
Ώ] Volume "\\.\C:" has been formatted.
ΐ] The NTFS USN journal on volume "\\.\C:" has been deleted.
Α] The NTFS USN journal on volume "\\.\C:" has been truncated. Chkdsk can truncate the journal if it finds corrupt entries at the end of the journal.
Β] File Replication Service was not running on this computer for a long time.
Γ] File Replication Service could not keep up with the rate of Disk IO activity on "\\.\C:".
Setting the "Enable Journal Wrap Automatic Restore" registry parameter to 1 will cause the following recovery steps to be taken to automatically recover from this error state.
Ώ] At the first poll, which will occur in 5 minutes, this computer will be deleted from the replica set. If you do not want to wait 5 minutes, then run "net stop ntfrs" followed by "net start ntfrs" to restart the File Replication Service.
ΐ] At the poll following the deletion this computer will be re-added to the replica set. The re-addition will trigger a full tree sync for the replica set.
WARNING: During the recovery process data in the replica tree may be unavailable. You should reset the registry parameter described above to 0 to prevent automatic recovery from making the data unexpectedly unavailable if this error condition occurs again.
To change this registry parameter, run regedit.
Click on Start, Run and type regedit.
Click down the key path:
Double click on the value name
"Enable Journal Wrap Automatic Restore"
and update the value.
If the value name is not present you may add it with the New->DWORD Value function under the Edit Menu item. Type the value name exactly as shown above.
For more information, see Help and Support Center at http://go.microsoft.com/fwlink/events.asp.