SP1 will start to run and click on Next through the installation.
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Once the Windows Server code name Vail has been updated you are ready to continue.
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STEP TWO
Logon on https://connect.microsoft.com/WindowsHomeServer with your connect credentials.
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STEP THREE
Click on Product keys (in the left hand side column).
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STEP FOUR
Click on Request a new product key.
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STEP FIVE
Click on Get Key. Copy the Key Value.
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STEP SIX
In Windows Home Server, open a command prompt. You can find it in your Start Menu.
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STEP SEVEN
Type “slmgr.vbs -ipk ABCDE-FGHIJ-KLMNO-PQRST-UVWXY” (where ABCDE.. is your new key as requested above). You can right-mouse click to copy in the Command Prompt. Thank you Diehard for that little trick!
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STEP EIGHT
Type “slmgr.vbs –ato”
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After a few seconds Windows will activate and extend the date.
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STEP NINE
Reboot the server, and your beta timeframe has been extended. You can check this by opening up a command prompt and typing winver. If you have followed the steps correctly the date will show 03/15/2011.
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Thank you again to Microsoft for allowing us to continue to beta test Vail through mid-March.
Tim

Nice job Tim, thanks for all the hard work.
Glad it worked out for you Tim, I have completely abandoned Vail. No more beta's for me. 🙂
Thank you for the comment. I hope you reconsider whenever the next beta is released.
Worked great except I had to run "slmgr.vbs /ato" instead of "slmgr.vbs
Hi, it didn't work for me. installed SP1 and changed the key. restarted and checked using winver but it still says it will expire on 10/01/2011. I tried a couple of keys so far and no luck.
What else shall i do?
Try it again. The steps have to be in that specific order. Mine did not seem to work the first time either but I had a step out of sequence.
I think i know the problem. SP1 did not install.I guess i thought it did. i get an error :Error_Invalid_Data(0x8007000d)when trying to install it.
I installed the System Readiness tool, tried again and no luck.
Can you please advise?
I have not seen that error. If after a restart it does still not update I would restore it. Do you backup Vail? You could perform the restore from prior to the change.
I don't have a Veil backup. Not to worry I have all my data backed up, i will install the usual WHS and use it until the new version is out.
Thank you very much for your help.
We are expecting to see a new beta in the next few weeks, hopefully, according to the Microsoft blog post of a few weeks ago.
I got the same "Error_Invalid_Data…" error when trying to install the SP1 package.
No fix for this one?
Found this comment when searching for the "Error_Invalid_Data…", and will see if it works for me too:
@InfiniteLurker Fixed this by installing the WUSignUpTool and installing SP1 via Window Update.
I have heard of a few people using that to get Windows 7 SP1 but not the Vail SP1. Did you try it?
I actually did not find a WUSignUpTool that I could download, but after a new reboot the Windows Server 2008 SP1 installation went well and I'm back in business.
I am gettting error invalid function 0x80070001 when trying to install sp1 on WHS vail?
Any ideas.
I am trying to install via RDP session.
Any joy on the install?
I have the same Error_Invalid_Data(0x8007000d) after installing the readiness update and rebooting twice.
(Obviously diabling both of my AV software)
Anyone have any new solution to add?
Derek
Given that there is a new beta out now and the DE functionality has been removed from the one you are using, you really should stop using it.