Daniel, the best method I've found is to do the upgrade in two steps. Go from 2.0 to 2.03 in the first bit and wait for it to finish. Then repeat but this time go from 2.03-2.06. For some reason that always works best for me. The error looks like a trigger that has some unfinished business? Perhaps stop and restart the SQL Server. Then press/start/search/type %TEMP% /Control A/Delete everything (any warnings just skip). Do a MS disk cleanup/Delete everything but restore points (if applicable).Reboot the server/check make sure SQL servers running then try my two step method.
Hope that helps, error sure looks like a hook or a trigger holding up the works, perhaps this method will allow you to get around it.