Hi, netnovice,
It seems that this is a known issue.
Please check this kb article
http://support.microsoft.com/kb/886695
And the cause is
quoted
"This problem occurs because the Iisutil.dll DLL adds an access control entry (ACE) to the desktop security descriptor for the services that run in the system context. The ACE lets the Microsoft Internet Information Services Worker Process Group (IIS_WPG) account log on to the system service desktop. However, if another process sets the desktop security descriptor for the services that run in the system context to a null value, Iisutil.dll changes the discretionary access control list (DACL). Iisutil.dll changes the DACL list so that any service that uses the noninteractive local system account cannot log on."
So, you should request http://go.microsoft.com/?linkid=6294451to get a hotfix for this issue.
Hope this helps,
Regards