We occasionally receive cases in support where the initial impression is that a recent Microsoft update “broke” TFS. In most cases an update is not the cause of the problem, however we are aware of a potential issue due to a recent update (KB973917) where the TFS app pool will fail to start (in fact, no app pools in IIS will start). This affects TFS installations hosted on Windows Server 2003. To restore TFS functionality, re-apply SP2 for Windows Server 2003. You can get SP2 for Windows Server 2003 from the appropriate link in the article here:
The following article provides a bit more details on the root cause of this issue:
Internet Information Services 6.0 may not function correctly after installing KB973917:
You may have to reboot your server after reinstalling SP2.
— George Archer