I found the problem - at some point these SQL instances must have encountered an error when patching or repairing and a registry key was set to indicate the error....

Yes, a cluster verification was done and it contained warnings but no errors.

Reporting Services 2008 has the same first connection slowness, and it's not using IIS. Is there a fix or configuration change that can be made to it?

Tried it - no change although it fills in the PID automatically so there's no chance of my typing in the wrong key. I did find the fix, however....

The DVD has been copied to the C: drive so setup is running from HDD.

Thank you for the response. When I try to do the edition upgrade, I get this message:

The following error occurred:

Access to the path 'C:\Program Files\Microsoft SQL Server\100\License Terms\SQLServer2008_License_ENT_1033.rtf' is...