The product instance been patched with more recent updates

I have seen a few SQL Server 2005 Failover Clusters running into this issue. Recently, a KB Article was published explaining 2 methods (KB934749) to resolve this issue.

One scenario when you can run into this issue is when you have a SQL Server 2005 Failover Cluster patched with Service Pack 2 or higher and you add a new node to the Failover Cluster, you could run into the issue then.

Another scenario is that the SQL Server binaries on the one node got upgraded to a higher build but one of the member nodes was not upgraded due to some fatal error. But this is a very very rare scenario because SQL Server 2005 setup makes sure it patches all the member nodes where the SQL instance is not active before patching the node on which the SQL instance is installed.

Troubleshooting SQL Server Setup and Upgrade Failures

1. The Setup Logs for SQL Server 2005 are created in the following location
"(system drive):\Program Files\Microsoft SQL Server\90\Setup Bootstrap\LOG"
2. There are two folders underneath this location:
a. Files
b. Hotfix
3. The files under the Files folder are created during the RTM installation of SQL Server 2005
4. The files under the Hotfix folder are created during Service Pack/Hotfix installation
5. For every failed setup of SQL Server 2005, there will be a .CAB (Cabinet file) created under the Files or Hotifx depending on what installation you are performing: RTM/Hotfix/Service Pack installation
6. Also, the LOG folder would have a summary.txt file which would give a brief overview of which component(s) failed to install
7. Using the Error Number and the Component Name, find out if you come back with any helpful links from http://support.microsoft.com/
8. If you are getting nowhere, then please post a question on the MSDN/TechNet Forums or open up a support incident with Microsoft Product Support Services

Please refer the following for more details:
http://technet.microsoft.com/en-us/library/ms143702.aspx
http://msdn2.microsoft.com/en-us/library/ms144287.aspx

Setup Logs for SQL Server 2000
The setup logs for RTM installations for SQL Server 2000 are installed with the following log sqlstp.log getting created in the %windows% folder.

The Service Pack setup logs are created having the following filename sqlsp.log under the same location specified above.

However, the hotfix logs are created with the following prefix "KB***.log"

The drawback with the SQL setup logs for SQL Server 2000 is that the setup logs get overwritten every time setup is run. But in SQL Server 2005, this is not the case. All the logs are retained in the BOOTSTRAP folder and a new set of log files are created with incremental numbers in the same location.