When upgrading a SPS2003 installation with an unusually large number of sites, the in place upgrade process may run into a condition where it runs out of memory. The following message will appear in the upgrade.log:
[SPWebTemplateSequence] [ERROR] [1/15/2007 11:30:03 PM]: Template SPSPERS#0: Exception thrown in activating SPSite scoped features for SPSite with URL http://servername/personal/mysite (Id=bbbbabb-bbbb-bbbb-8f74-ee639a937347). Skipping this SPSite for template upgrade. Exception: System.OutOfMemoryException: Server Out Of Memory
There is no memory on the server to run your program. Please contact your administrator with this problem.
Try configuring the server so that it supports a web garden as outlined in this article
This also goes for ASP.NET applications as well. This typically can be encoutnered when the number of SPS2003 sites are greater than about 100 or so.