[Resolved] Server 2008 stuck on "Configuring updates"

Windows 2008 Server hangs at "Configuring Updates - Stage 3 of 3 - 0 % Complete"

The Configuring Updates - Stage 3 of 3 - 0 % complete is one of the most feared screen when it comes to Windows 2008 Server - RTM not R2. The server may sit there for a while and you have no clue as to what needs to be done to avoid it. The forums and online blogs have numerous posts concerning this error but there is no single step or fix to this problem. I can share with what I faced recently and what was done to resolve the issue. 

Here are some possible resolutions:

1. The most common fix is to boot the server with Windows 2008 installer CD, go into Recovery Console and rename the file c:\windows\winsxs\pending.xml to something as pending.old. You may even delete the file as a potential fix. This file contains the list of patches that needs to be applied on the system undergoing the updates.  After you have deleted or renamed the file, try to reboot Windows 2008 and it may bypass the Configuring Updates screen and display your desktop.
2. Another fix is to apply #1 and along with that perform the following actions from the Recovery Console:

a.      Type regedit, and Select HKEY_LOCAL_MACHINE.

b.      From the File menu, click Load Hive

c.      Locate the following folder: c:\windows\system32\config\components

d.      When prompted for a name, type Offline_Components or anything you want to.

e.      Delete the following registry subkey:

f.      HLKM\Offline Components\AdvancedInstallersNeedResolving

g.     HKLM\Offline Components\PendingXmlIdentifier

h.     Restart System