I finally had all my issues resolved with SQL 2005 on a Windows 2008 Cluster.

There were several issues:

1) Issues with SSPI handshakes when the service account was trying to use Kerberos over TCP/IP registering SPN(s) when bringing SQL service online in 'Failover Cluster Management'

Creating a Windows Server 2008 R2 Failover Cluster. In the Enter server name box type the name of your servers that participate in the cluster and click the Add button. Leave the default option to validate the cluster and click Next. In the Validate a Cluster Wizard go with the defaults.

This was resolved by granting write and read access for the SQL startup account to add and remove SPN(s) (Server Principal Names) from AD.

2) Problems with SP2 update. The service pack would install properly but when creating a maintenance plan it would fail.

This was resolved by manually running the query sysdbupg.sql located in the C:Program FilesMicrosoft SQL ServerMSSQL.1MSSQLInstall folder.

3) Problems with Database Mail using Basic Authentication.

Remove mail profile and account. Add the Mail profile and account back using the option 'Windows Authentication using Database Engine Service Credentials'.

4) Removal of the BUILTINAdministrators will cause the SQL Service not to start via Failover Cluster Management even though the SQL Startup account is a system admin on the SQL Server.

This was resolved by adding NT AUTHORITYSYSTEM as a 'sysadmin' to SQL Server.

I have come up with a standard build sheet for installing SQL 2005 on Windows 2008 Cluster: (This only works if you have granted your SQL startup accounts the ability to read and write SPN(s) in Active Directory).

Windows Server Failover Clustering

1) Verify Cryptographic service, Remote registry, & Task Schedule are running on both nodes.

2) Verify no connections on passive node.

3) Configure Network Transactions for local MSDTC on each node. (http://technet2.microsoft.com/windowsserver2008/en/library/4532d3d5-a406-492e-9e74-daa70c6591461033.mspx?mfr=true)

4) Create 'Empty Service or Application' in Failover Cluster Management console rename to SQL Virtual name.

5) Assign appropriate LUN(s) to newly created Service/Application.

6) Install SQL Server 2005 (RTM).

7) Install SQL Service Pack 2.

Windows Server 2008 Install Failover Clustering

8) Post SP 2 Hotfix (Build 3050).

9) Install Visual Studio SP1.

10) Visual Studio Post SP1 Hotfix.

11) Install SQL Performance Dashboard add-in.

12) Add SQL Startup account to 'Lock Pages in Memory' Local Security Policy.

Windows Server Failover Cluster

13) Add NT AUTHORITYSYSTEM as a 'sysadmin' to SQL Server.

Windows Server Failover Cluster Setup

14) Remove BuiltinAdministrators from SQL Server.

Failover Clustering Windows Server 2016

Microsoft provides a great webcast on the topic 'Microsoft SQL Server 2005 Failover Clustering on Windows Server 2008'