This is some breaking news (literally) for some of you.  It seems that there are some circumstances where a partially applied Server 2003 SP2 leaves a server with mismatched IIS DLLs (some SP1 and some SP2).  When MS KB973917 is applied to that server, core IIS functions related to the application pools do not work properly and result in a failed startup of the app pool.  The solution from MS is to re-install Server 2003 SP2 and reboot.  More details at KB2009746.