KB ID 0000771
If you attempt to install Exchange Service Pack 3 on an Exchange server that is currently running Service Pack 1 you will see this error.
Note: This was a prerequisite for SP2, so if you do not see this error your Exchange was deployed with SP2 slipstreamed into it, or the problem was dealt with when SP2 was installed.
1. Launch the Exchange Management Shell
2. Execute the following two commands;
3. Try again to install SP3.