Hi Brian.
Sorry to hear you are having troubles upgrading from RTM to R2. This forum addresses questions about the Application and Multi-Server Management aspects of SQL Server 2008 R2. It doesn't sound like the issue you describe is related to that feature.
A more appropriate forum is the setup and upgrade forum.
http://social.msdn.microsoft.com/Forums/en-US/sqlkjsetupandupgrade/threads
Also, you might consider filing the bug in connect.
https://connect.microsoft.com/SQLServer?wa=wsignin1.0
All the best,
Jennifer Beckmann
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