SQL Server issues

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ntoren

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Recently I have been having some trouble with our ACT! database software. Often it hangs when opening and I have to restart the computer for it to work. Had the thought of checking the SQL Server for some reason and indeed it's often Stopped. I restart it and then problem solved. Pain in the butt but not terrible. Then when I am informed of new updates available I attempt to install them and am always getting the Error message: Code 737D Windows Update encountered an unknown error. I click the link "Get help with this error" and am taken to:
Windows Update error 737D

If you receive error 737D when you try to install Windows Vista updates, , it means that a previous update for Microsoft SQL Server 2005 did not finish installing. Microsoft SQL Server 2005 is used by photo gallery, e-mail, and other types of programs. To fix the problem, follow these steps:

1. Click to open Programs and Features.

2. Select Microsoft SQL Server 2005, and then click Change.

3. In the Currently installed programs list, select Microsoft SQL Server 2005, and then click Change.

4. In the Component Selection window, select Database Engine, and then click Next.

5. In the Feature Maintenance window, select Database Engine, and then click Next.

6. In the Microsoft SQL Server 2005 Setup window, click Next.

7. In the System Configuration Check window, click Next.

8. In the Change or Remove Instance window, click Complete the suspended installation.

9. In the Error and Usage Report Settings window, click Next.

10. In the Ready to Update window, click Install.

11. In the Setup Progress window, click Next.

12. Click Finish.

All goes well until step 7. It performs the check with "Success" and notes 1 Error. Next to Error I click "Message" and get:

- Pending Reboot Requirement (Error)
Messages
Pending Reboot Requirement

A previous installation required a reboot of the machine for changes to take effect. To proceed, restart your computer and then run SQL Server Setup again.

Restarting does not solve this as I have followed the same steps 3x and land back here again. So, my questions ultimately:

1. What's happening here?
2. How important is this Update? Windows categorizes it as "Important."
3. Are the ACT! issues and this update connected?
 
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