If you are having an issue installing a service pack (which actually is a full binary reinstall/upgrade) of exchange 2007 where it prompts you to reboot because another install is in process, it means a registry flag failed to delete previously. To resolve the issue delete the key as follows:

1. Open a registry editor, such as Regedit.exe or Regedt32.exe.

1. Navigate to HKLMSYSTEMCurrentControlSetControlSession Manager

1. In the right navigation pane, right-click the PendingFileRenameOperations key and select Delete.

1. Close Registry Editor

Credit technet:

http://technet.microsoft.com/en-us/library/cc164360(EXCHG.80).aspx