Migration Failure SBS2008R1 - SBS2011 Standard no recoverey possible ... New Plan Advice

Was attempting a migratory install, (hardware + software upgrade) system choked out;  Went for a complete restore but backup took place during migration so the backup is a mutated child;  It restores back with ad prep already run :/ no users rights computers etc.  Just flat files survived.  Frustrating as heck;  

Mean time I have gotten the old server (the migration source) (Tyan 2 Xeon 5500 24gig, 1tb, and 420gig Raid1 SSD drives) reinstalled/restored with SBS2008 and Sql2008 (our propriety requires it);  Re-made users, but not computers so all end clients are running funny.) Not a huge surprise given situation.  So we limp users can't see old exchange files  (as they are in ost still);  Rights are just flat wrong everywhere, no shares allowed, fax services are corrupted.  List is  large.   Need to reinstall obviously.  

That being said I began a vanilla load on the new hardware of SBS2008 (why?? Cause I was using a usb based SBS2011 downloaded from tn and figured it might have been partial cause);  And secondly hadn't received the SBS2011 kit yet (got in today);  It is also running on our backup DSL system so it can't see ANY of my other machines;  
I finally have finished this vanilla load all updates/drivers and am at the good old configure steps;

Now of course the questions begin.
Do I finish this SBS2008 install (configure exchange, do the internet wizards, usual tweaks I like to run);  Bring all network to life (switch it to real switches and T3 Internet, join all my users, then try to do an Upgrade install of SBS2011 (scary);  

Can I just flat run the Upgrade install? On the vanilla install with NO configurations run yet. (also scary);

Format New Hardware try a From Scratch install of SBS2011 (oh boy why do I feel I'm leaning this way (waste of 25hrs);  Configure ... get everyone up and running correctly (for the first time in a week), Nuke current dead server and rebuild it as well (maybe via migration);  I just don't know what to do.  What is the real proper way to achieve this..

Resources on hand:
System 1 (Older)
Tyan S7010 based server Dual Xeon 5500's 24 gigs of ram, Raid 1 w/1tb drives, and a raid 1 with 2 420gig SSD drives.  Running a Limping SBS2008 install with SQL2008 on same box (it was a bad scene);
System 2 (newer)
SuperMicro 2042G,  4 X Opteron 8 core processors, 32 gig of ram; LSI Mega Raid (hardware) left motherboard built in drive controller disconnected, Raid 50 w/8 240gig drives BBU decent 8port solution (oh yea should I be caching IO or not?) ; now has same SBS2008 installed on it not the SQL part, and is vanilla as can be;

Software on hand: SBS2008 R1 Premium, and SBS2011 w/ Premium add on.
(Yes I know they can't play together no TWO SBS machines in one domain);  

Goals for system:
1. Get out of SBS Prem 2008 and into SBS2011 (Share Point is big for us owner LOVES new tech the make it in AJAX type cause AJAX is the new buzzword )
2. Can't cost this company anymore down time or it's my neck(job);  So I have to leave the beat up machine running before conversion.  And time the upgrade right.  
3. Need Uptime I have to be able to keep our SQL database up at all times.  (So another DC on second license been reading this one a lot today some say do it other say pointless);  Whats the use if my users can login when one is down, but can't actually do anything? Kind of confused about how a SQL Cluster would work and if I'm properly licensed.
4. Speed is crucial as well hence heavy hardware for such a small site.
5. Exchange isn't used anymore but of course has years of data on it so I need to bring it back at the very least just to restore users pst files from ost format. :/ UGH..
6. HyperV was installed but really only utilized by me for database testing;  However if it's a way to protect this system from Failures I'd be willing to lose some speed hoping the hardware is overkill enough.

Any advice is welcomed as I'm feeling overloaded with possibilities most of I'v never tried... so I'm bit scared never had such a massive failure in my life... don't have another massive failure to spare.

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Cliff GaliherCommented:
You cannot perform an in-place upgrade of SBS, thus options #1 and #2 are not options.

If it were me, I'd restore your mutated backup of SBS 2008 (at least permissions on files will be right), then seize FSMO roles, clean up AD (this is doable) and then start running the SBS BPA and clean up remaining issues. In short, don't introduce something new (SBS 2011) until what is existing is stable again.

Then, with good backups in hand, you can retry your migration to SBS 2011 (yes 25 hours wasted.)


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Are there any other backups, even old ones that you could restore AD from?
alnrmtoutAuthor Commented:
Re-Reading post probably not the solution writers issue but my own.
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